Las Vegas Sands' CEO Discusses Q4 2013 Results - Earnings Call Transcript

Start Time: 16:37

End Time: 17:46

Las Vegas Sands Corp. (LVS)

Q4 2013 Earnings Conference Call

January 29, 2014 02:30 PM ET

Executives

Sheldon Gary Adelson - Chairman and CEO

Michael Alan Leven - President and COO

Robert G. Goldstein - President - Global Gaming Operations

Daniel J. Briggs - Vice President of Investor Relations

Analysts

Joe Greff - JPMorgan Chase & Co.

Jon Oh - CLSA

Shaun Kelley - BofA Merrill Lynch, Research Division

Felicia R. Hendrix - Barclays Capital, Research Division

Steven Wieczynski - Stifel Nicolaus

Carlo Santarelli - Deutsche Bank

Cameron McKnight - Wells Fargo Securities, LLC, Research Division

Robin M. Farley - UBS Investment Bank, Research Division

Harry Curtis - Nomura Securities Co. Ltd., Research Division

Operator

Welcome to the Las Vegas Sands Corp. Fourth Quarter 2013 Earnings Conference Call. I will now turn the call over to Mr. Daniel Briggs, Vice President of Investor Relations.

Daniel J. Briggs

Thank you, Rachel. 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 provisions of federal securities laws. The Company's actual results could differ materially from the anticipated results in those forward-looking statements. Please see today's press release under the caption Forward-looking Statements for a discussion of risks that may affect our results.

In addition, we may discuss adjusted net income and hold-normalized adjusted net income, adjusted diluted earnings per share and hold-normalized adjusted diluted earnings per share and adjusted property EBITDA and hold-normalized adjusted property EBITDA, all of which are non-GAAP measures. A definition and a reconciliation of each of these measures to the most comparable GAAP financial measures are included in the press release.

Please note that this presentation is being recorded. We also want to inform you that we have posted supplementary earnings slides on our Investor Relations website for your use. We may refer to those slides during the Q&A portion of the call. Finally, for those who would like to participate in question-and-answer session, we ask that please limit yourself to one question and one follow-up so we might allow everyone with interest to participate.

With that, let me please introduce our Chairman, Sheldon Adelson.

Sheldon Gary Adelson

Thank you, Dan. Good afternoon, everyone and thank you for joining us today. We are extremely pleased with our strong financial results, which reflect continued execution of our strategic objectives. The highlights of the quarter from my perspective are as follows.

We delivered outstanding growth in revenue, cash flow, net income and earnings per share once again this quarter. With our hold-normalized adjusted diluted earnings per share increasing 33.8% to reach $0.87 per share. We produced another record quarter in Macao where we continue to grow faster than the Macao market in mass table games, the most important and profitable segment in that market.

We also realized strong growth in the VIP segments. Importantly growth was also displayed in our non-gaming hotel, retail and entertainment offerings in Macao. This enhances both the growth platform and profitability of our portfolio of properties on the Cotai Strip, while contributing to Macao’s diversification and appeal as a leading business in leisure tourism destination.

The confidence we have in the strength of our business and the reliability, predictability of our cash flows have allowed us to raise a recurring annual dividend for the 2014 calendar year to $2 per share, an increase of 42.9% compared to the $40 per share recurring dividend we paid in 2013. Our Board of Directors had announced that our first quarter 2014 dividend of $0.50 per share will be paid on March 31, 2014 to holders of record on March 21, 2014.

In addition to the dividends we paid in the fourth quarter of 2013, we returned nearly $225 million of capital to shareholders during the quarter through stock repurchases. Our financial results again reflect a strong performance of our principal strategic objectives that we have outlined in past earnings calls.

Focusing on organic growth, hold-normalized adjusted property EBITDA across our Macau property portfolio grew 55.8% to reach a record $887.6 million. Our mass table win in Macau for the quarter increased 58.3% to reach a record $1.22 billion in a market that grew approximately 40% in the quarter. So our growth rate was nearly 47% faster than the Macau market in the most important and most profitable segment in Macau.

We have grown faster than the Macau market in mass table wins every quarter this year. One year ago, we generated approximately 770 million in mass table wins and we grew that in each successive quarter to 867 million, 929 million, 1.06 billion and finally 1.22 billion in the fourth quarter of 2013.

Our annualized departmental profit in this segment has increased to approximately $2.2 billion from approximately $1.4 billion over the last year. That growth has allowed us to bring in additional $800 million annually to our departmental profit and EBITDA. I guess it's the wonder that analysts and journalists are saying that we lead the market by far in mass market and in premium mass.

We see this trend continuing in the future for three reasons. First, more people visiting both Macau and our property portfolio on the Cotai Strip. Visitation from China to Macau is up 10% of the year end of December 31, 2013. While mainland visitation to Macau from outside the neighboring Guangdong and Fujian provinces was up 15%. Growth in the more distance provinces is meaningfully exceeding the visitation growth from the neighboring Guangdong and Fujian provinces.

We believe the growth trend will be enhanced by infrastructure as tens of billions of dollars of adjustments in Macau, Guangdong province in Southern China and enable more people to more easily reach Macau and accelerate Macau's evolution as the leading business and easy destination in Asia.

The infrastructure investments include the world's most extensive high speed rail network, a $10 billion bridge directly connecting Macau and Zhuhai with Hong Kong and more than $20 billion of investment in the Special Economic Zone of Hengqin Island, which is adjacent to Macau and Guangdong Province.

Second, as visitors come from further away they stay longer and they spend more money on dining, retail and entertainment. Overnight visitors to Macau have the time to enjoy a full complement of entertainment amenities of the Cotai Strip and are spending 2.1 nights on average in Macau. Now that 2.1 night length of stay for overnight visitors has increased and still 5 below Hong Kong average of 3.7 nights. We believe there is room for expansion in Macau's average length of stay for overnight visitors and increasing length of stay will contribute to growth.

Third is our data base of customers continues to expand. We have the ability to further optimize our mass table productivity across our property portfolio. In particular, we will continue to have the ability to increase the utilization of our market leading 9,000 plus hotel room and suite inventory on the Cotai Strip for our most valuable mass gaming customers. And three, we've expanded on our mass table productivity to $12,143 of mass win per table per day across our Macau property portfolio from just $9,716 per day one year ago.

We're confident that we have additional opportunities to optimize our table productivity across the portfolio in the quarters and years ahead. The VIP business is also exhibiting strong growth with our Rolling Volume increasing 26% to reach a record $49.54 billion. That represents Rolling Volume per table of approximately $1.23 million per day which was a record for the company and was up 33.7% compared to the quarter one year ago.

The Venetian Macao delivered another record quarter, and due to our market-leading investments in non-gaming offerings, continues to lead the Macau market in visitation and business and leisure tourism appeal. Our fundamental multi-tiered Integrated Resort development strategy, which features convention, exhibition, hotel, retail and entertainment offerings, helped delivered 17.4 million visits in the quarter to our property portfolio, including over 8 million visits to the Venetian Macao alone.

EBITDA at the Venetian Macao increased to market-leading $433 million for the quarter. When you take 8 million visits per quarter and you multiply that by four, that's more than the number of individual unique visitors to Macau. When you take 17.4 million, that's the equivalent of – let's see 40, 50 – over 60 million people, I think closer to 70 million people for the year with only 30 million unique visitors arrived in Macau, which means that Venetian Macao is a must see for everybody who comes in, but of course one can conclude that we have 1 million people coming in 32 times or we have 32 million people coming in once each or likely it's something in between. So when you think about it that you capture everybody, every visitation for every unique visitor, it's an amazing statistic.

Sands Cotai Central, our latest and largest property on the Cotai Strip, continues its steady ramp and delivered $237 million in EBITDA this quarter. On a hold-normalized basis Sands Cotai Central generated 273 million in EBITDA during the quarter and is approaching 1.1 billion annualized EBITDA run rate. And that's only for the first quarter this year. By the time we get to the fourth quarter we'll be running at that point at hopefully a significantly higher run rate.

That's the most important take away from the strong performance at both the Venetian and Sands Cotai Central. It's a clear positive impact that the increased critical mass of convention, exhibition, dining, retail and entertainment offerings including over 9,000 hotel rooms brings to the overall tourism appeal of the Cotai Strip. Our property portfolio was attracting customers who were staying longer which in turn is driving growth for both properties.

The Venetian and Sands Cotai Central worked together to meaningfully enhance the overall appeal of the Cotai Strip, increasing both visitation and length of stay and attracting more valuable set of customers to Macau and the Cotai Strip. Thus increases in returns across our entire property portfolio. We couldn't be more enthused about the future benefits to both the Venetian and Sands Cotai Central, but the additional dining, retail and entertaining offerings at the Parisian including 3,000 more hotel rooms and suites will bring to the Cotai Strip.

Now turning to Marina Bay Sands in Singapore. On the whole normalized basis we generated USD 372 million of EBITDA. Non-Gaming win increased to USD 4.63 million per day, I believe for the first time. In addition our hotel business reflected strong growth with ADR increasing to USD 425 and occupancy approaching 97%. We expect to drive growth in the future as we focus our marketing efforts on high value visitors in the surrounding South East Asian region.

Turning to development growth in our current markets, construction continues at The Parisian Macau, our fifth property on the Cotai Strip and our sixth in Macau overall. We remain on budget and on schedule. Subject of course to timely government approvals that may be required, we continued to target a late 2015 opening of our latest Integrated Resort. In addition we have now started construction on the same regions tower the fourth and final tower of the Sands Cotai Central. We are targeting the fourth quarter of 2015 for the completion of that project which will add over 700 additional hotel and apartment units to our portfolio on the Cotai Strip.

Moving on to the pursuit of opportunities for Integrated Resort Development in new markets and geographic areas. In Asia, activity levels in Japan have increased and we are pursuing the potential for Integrated Resort Development in this promising market with great enthusiasm and optimism. Korea has also shown increased activity, and we are looking forward to the potential development opportunities there. We believe our vision for and on creation of the convention based Integrated Resort business model together with our history of market changing developments in Las Vegas, Singapore and Macau that deliver meaningful and measurable economic benefits for our host markets including the increased employment, business and leisure tourism and visitor spending position us exceptionally well as we compete for these development opportunities.

Finally, let's turn to one of our favorite subjects, the return of capital to shareholders. Through December 31, 2013 we have returned more than USD 5.5 billion towards shareholders through dividends and stock repurchases over the last two years including over USD 4.8 billion to Las Vegas Sands shareholders and over USD 700 million to the non LVS shareholders of Sands China. As I mentioned before we have raised our recurring annual dividend to Las Vegas Sands to $2 per share for the 2014 calendar year, an increase of 42.9%. For Sands China Limited we have increased the interim dividend for 2014 by 30% to HKD0.87.

Sands China Limited is also paying a special dividend of HKD0.77 in February. We have every intention of increasing the dividends at Las Vegas Sands and Sands China in the years ahead as our business and cash flows continue to grow. At December 31, we have over 1.4 billion remaining under our current stock repurchase authorization at Las Vegas Sands and we expect to approach us at least 75 million of stock per month. We look forward to continuing to utilize the program to return capital to shareholders and to enhance long-term shareholder returns.

We're pleased to have completed the refinancing of our U.S. restricted group credit facility and to have extended the tenure of that debt on very favorable terms till the end of the decade. Looking ahead we expect to maintain the strongest balance sheet in the industry which provides another meaningful competitive advantage as we pursue global growth opportunities. That’s a tongue twister. People have asked what leverage level we would be comfortable with in the future as our cash flows grow. We would be comfortable with the gross leverage debt to EBITDA ratio of between 2.0 times and 3.5 times before additional debt related to the future development of integrated resource and new markets. Note that our leverage ratio is 2 times today, so we have the capacity to increase our leverage levels as we seek that it still stays within the range.

So in summary, we are successfully executing our business model that we have outstanding operating momentum as we look to extend our leadership position in convention based integrated resource development and operation. We had a vision -- we’re the visionaries of the convention based Integrated Resort business model and the leaders in the industry. Couple that with our financial strength and our disciplined focus on operational excellence, not to mention our good looks and churn, and I could be more confident about our future success. It's my job together with our outstanding management team to make sure we stay disciplined and continue to execute our strategies that will both extend our industry leadership in current and new markets and generate strong growth and outstanding returns for our shareholders in the years ahead. Yay! dividends!

With that let me turn the call over to the operator to begin the Q&A session.

Question-and-Answer Session

Operator

(Operator Instructions) Your first question is from Joe Greff from JPMorgan. Your line is open.

Joe Greff - JPMorgan Chase & Co.

Good afternoon everybody. Most of the questions we’re getting from investors this evening relates to Singapore, and also I have a follow-up for something else. And I know you kind of gave us the normalized EBITDA performance in the quarter; what was the normalized for hold EBITDA margin in the 4Q at MBS?

Sheldon Gary Adelson

About 47%. It's a little north of 47%.

Joe Greff - JPMorgan Chase & Co.

Okay. And are we taking with -- we’re seeing progress obviously in the Non-Rolling chip and the Slot Handle that this segment margins in that are probably going to be lower there where we have historically just because the cost of acquisition and promos accounts relating to hotel rooms are impacting that?

Robert G. Goldstein

Joe, it's Rob. I think -- well, first of all, we’re seeing increased volumes in both all our businesses there except for the rolling chip piece. I am very pleased with the growth in the foreign visitation; I’m very pleased with the growth in the Non-Rolling Slot ETG segments especially the premium portions. I think our margins remain low 60s in that most important segment, I feel pretty good about it. Obviously we’re paying more for our hotel rooms because we are getting very, very high cash break the highest new Singapore marker, ADR’s keep getting higher and higher, and so we’re paying more for those rooms. But nevertheless I’m very pleased with our team as far as the Non-Rolling chip play spot and table the issue there obviously this quarter is all about the whole percentage on the rolling chip piece and that’s continually disappointment and hopefully that will level out. We’re confident that our range 2.7 to 3 is reasonable and achievable, but fairly this quarter we missed by quite a bit.

Joe Greff - JPMorgan Chase & Co.

And then my follow-up relates to capital allocation broadly. Sheldon, do you think you’re being at 3.5 times growth leverage increase your viability for new integrated resorts? And the reason why I ask it in that sense is that …

Sheldon Gary Adelson

Increases to what?

Joe Greff - JPMorgan Chase & Co.

Does that change your ability in your view to compete, i.e. having a phenomenal balance sheet when it comes to the competitive level for new IR’s in Japan or South Korea?

Sheldon Gary Adelson

Joe, I am glad you brought that up, because I forgot to add an addendum to my prepared remarks. We probably have somewhere between USD 12 billion and USD 14 billion worth of monetizable retail mall sales potential. We could wipe up every dollar that we owe and more if we just monetize our increasingly valuable real estate. We were just talking this morning about the average sales per square foot on the very hot, through the roof, square foot sales in U.S. dollars on the first level of the shops at Four Seasons. And the lower amount on the second level which is increasing now with close to any average of 10,000 visitors going across our pedestrian, air condition, moving sidewalk, pedestrian bridge between Sands Cotai Central and Venetian.

The average for the two levels I think is $4,600 a square foot, the highest mall in the United States is the Forum Shops across the street followed in second place by the Grand Canal Shoppes here at the Venetian. The Forum Shops is only about $1,200, $1,300 or $1,400 a square foot. Our worst mall is doing better than that. So we've got plenty of cash, we could be highly competitive to doing two, three or maybe even four properties in emerging markets. And I pray that we will have two, three or four merchant market possibilities. So I have to tell you we are pumping money out of here.

Yesterday, we were talking about our balance sheet and the financial department said how much cash we had on hand. And Mike Leven and I looked at each other and say, do you realize – these are unspoken words that we come from the slums in Boston, both of us or the best you can say about them were tenements. That's the best you can say about where we came from. So we looked at each other and I said, look at the billions of dollars we got sitting there. Could you ever imagine – it was unspoken. We looked at each other and our looks said all the words. Can you imagine when we grew up in Dorchester, Roxbury, Mattapan section of Boston that we would have billions of dollars sitting in the bank wondering what we're going to do with it?

Joe Greff - JPMorgan Chase & Co.

Just a follow-up to the comment about monetizing the retail real estate assets; so are you commencing a process now or is it more of a theoretical at this point?

Sheldon Gary Adelson

So, we are commencing the process for – approaching final approval from Macau SAR. So if and when we decided that it was time to monetize them, all we have to do is pull the trigger.

Joe Greff - JPMorgan Chase & Co.

Got it. Thank you very much.

Sheldon Gary Adelson

You're welcome.

Operator

The next question is from Jon Oh with CLSA. Your line is open.

Jon Oh - CLSA

Thank you.

Sheldon Gary Adelson

Hi, Jon.

Jon Oh - CLSA

Sheldon, if I could start with maybe looking out in Cotai. We expect several new properties opening in 2015 and in 2016, including your Parisian. What do you think will happen to your existing Cotai properties over this period? And I guess – I'm trying to see how do you plan to stay competitive or do you think that the additional supply can be easily absorbed by the market?

Sheldon Gary Adelson

Your last statement is right on the mark. You hit the nail right on the head. The market is growing. As we talked about earlier, the infrastructure improvements in Southern China are so overwhelming. In 2016 there is going to be a second airport in Macau and there actually won't be a second airport in Macau but it will be sure to get to Macau from the Hong Kong International Airport servicing 180 cities with 100 scheduled carriers. It will be sure to get to Macau in 20 minutes from there than it will be to drive to Hong Kong Island for 45 minutes. So the infrastructure and the demand, Jon you know as well as anybody and you're probably one of the most with all the other analysts on the phone, the foremost analysts and knowledgeable in this field. You know that this is a supply driven industry. Let's not forget that. The more properties go up, the faster we grow. I – my vision when I looked at the bay and the swamp that is today Cotai, I said that what we'll work here is critical mass. And I don't care I said at the time whether the critical mass is ours which I much prefer or the critical mass comes from ours and others. That critical mass is going to make the Cotai Strip Asia's Las Vegas. And the rising tide carries all boats. When the Venetian alone is getting almost 10% more visitation than the number of unique visitors that arrive in Macau, I don't understand how other people can compete with us. When we get 2.5 visitations from each individual, unique visitors to Macau, I don't see how anybody can compete with us. Between now and the time it is open, there will be three properties open in 2015; Galaxy, Macau Studio City and the Parisian. We may open before at least one of them. I'm happy to say that we are very pleased with our budget and our schedule. I can't give you the details because things can change. But right now I'm quite happy with the progress. So, we have the largest footprint meaning we have more square footage of the casino space than any of the other competitors, maybe more than one – more than one or two which we have. Secondly, we have more gaming tables than everybody else because we ended up building more non-gaming and therefore the attraction to bring in more people. So we ended up with more tables. When they put the cap on, we were leading the table count. Number three, as I repeated in my prepared remarks, we are the leader in the mass market and we are growing. You see the growth from 9,000 to 12,000 – over 12,000 in just 12 months. We're the leader in the mass market and although (indiscernible) is doing quite well in the premium mass, we are rapidly catching up and we hope to and expect to surpass them. And we have 9,000 rooms. We're building about 700 more plus 3,000 and we're in the process of putting through the implementation of the permission that we have to sell the Four Seasons apartments on a true-up basis. That will put another 300 units. We had the foresight and the vision to build because the whole vision for Cotai was ours, mine. We had the foresight and the courage to build the number of rooms and the amenities that we did without getting paid for that.

Jon Oh - CLSA

Okay. If I can follow up with just another question. On your prepared remarks, you said that you're expecting substantially higher EBITDA for Cotai Central this year. You guys have done a good job ramping up Cotai Central to over $1 billion in EBITDA in a very short period of time. Could you give us a sense of how much more headroom do you think you can expect? And is the improvement largely going to come from mass or is it going to come from VIP? Thank you.

Sheldon Gary Adelson

I'll give that to Rob. He hasn't spoken so much today.

Robert G. Goldstein

Hi, Jon. How are you doing? SCC, you're right, has ramped to $1 billion we think is lot more running room for a lot of reasons. The best here would be – room is the biggest driver of mass gaming and as well VIP gaming in Macau, $5,700 at Sands Cotai Central. We also put our Dragon Master room later this year probably in the spring. I think we're in the infancy of Cotai Central. A lot of people are questioning its viability. Now it's running $1 billion plus. Our next goal is $1.2 billion, $1.3 billion. Everything is viable to grow there. The only thing inhibiting that property is that – our biggest win per unit per day in the mass side has doubled from $6,600 per table to $13,900 [ph] Q4 '13, so that's a wonderful ramp. Can it get to ’15, ’16 table we believe it can. We believe Dragon Master can drive the premium mass and also competes in the junket segment. I walked through the new retail space on the third floor last week and I think that property just has lot more room to grow. Everyone is excited about $1 billion threshold, but that’s just the beginning. So we’re very excited about all the segmentation just like the Venetian, it's got room, Dragon Master, Premium Mass, Pure Mass, Junket Play. So SCC has a wonderfully bright future, lots of growth there.

Jon Oh - CLSA

Okay, thank you.

Operator

The next question is from Shaun Kelley with Bank of America. Your line is open.

Shaun Kelley - BofA Merrill Lynch, Research Division

Good afternoon guys. I wanted to start by going back to your comment, in the prepared remarks about the 3.5 -- going up to 3.5 times gross leverage. That number was little higher than actually we were expecting and I was just wondering do you guys think there is an optimal time to begin kind of thinking about this given where we stand with kind of record low interest rates and still -- and possibly forecast for those rates to start to move higher?. Just any thoughts on that will be helpful.

Sheldon Gary Adelson

Well, that outside number is thinking about the possibility of getting some money and doing something with it. Right now we don’t have any demand for large amounts of money. So the billions of dollars of EBITDA are throwing up billions of dollars of free cash flow with nothing to do with it. And when I joke around and say Yay dividends, I think that’s what I and every other shareholder wants to hear, Yay dividends, Yay stock buyback. What are we doing with the money? We’re in a position that I -- I’m basically a debt averse person. And I never wanted, I had bad experiences when I was a kid, well I’m still a kid, but I’m a little older on the calendar. But I don’t want to be in a position where I owe money. I had to take billion dollars out of my pocket in ’08 and ’09 because we owed money. So I don’t want to be put in a position that I’m just going to speculate and all money with no immediate liquidatable obligations or if anything – if we have money to borrow to do something with. If we can’t do with development, if we got an okay to go into Japan for instance tomorrow morning, we’re not going to need billions in money until two or three years from now. So we got plenty of time to build up the money and I’ve concluded that each and every integrated resort will have its own standalone financing and it's not going to refinance with equity from our other income producing properties. We went through that with our previous management. We are not going to go through that again. So we are not at 3.5, we’re far from it. And other -- I’m not even sure we want to get up to 3.5, but we want to be honest and clear with you and tell you there is a possibility we could go there. But for those of you who know me personally, you know I’m debt averse and that I’m not going to take any money that I can't quickly repay. I’ve had enough lessons in my life, about making sure that I have enough cash flow to take care of my obligations.

Shaun Kelley - BofA Merrill Lynch, Research Division

That’s really helpful, Sheldon and really appreciate the candor. You brought up Japan in that discussion as well, so maybe switching to that topic, if you could just give us a little bit of an update about where you see Japan in kind of in the timeline in the phase right now and very specifically, is it your thought right now that partnerships are going to be required for -- to enter into Japan or just how do you think about partnering with someone else for that project?

Sheldon Gary Adelson

I just came back a few days ago from Japan, same people there. So I will let him answer that question.

Michael Alan Leven

Thanks, Sheldon. Shaun, its Mike. I just came back from Japan. I was there a week or so ago. The process in Japan which has been made public is that of course the first legislation passed. The second legislation should be passed in June, which forms the committee to set up the regulations and the locations as well as the information for bidding for whatever size is selected. Today in Japan, everybody that we spoken to believes that second piece of legislation is going to pass and we’re preparing -- we’re ramping up people there, we’re opening an office there, we’re doing all the work in order to do that. To talk about partnerships was in most of the conversations in Japan, the level of partnerships was not. There is interest from some major Japanese conglomerates, major Japanese companies to participate, but until we -- they really know the licensing situations and the investment realities; we don’t know for sure whether that will take place. We have made comments to [technical difficulty] talking to that we’re not a closed door on some of those partnerships and we’ve been advised by certain members in the Japanese community to keep the door open and keep the mind open in that situation. So we don’t know exactly what’s going to happen, but it's likely that there could be partnerships involved.

Shaun Kelley - BofA Merrill Lynch, Research Division

I would like to ask something about that. You know not one of the companies in Asia, in Japan have had operating experience. I think universal, a former (indiscernible) had a position on the Win Board, but none of these guys have an infrastructure to operate or to operate integrated resort/casinos?

Sheldon Gary Adelson

We went through this fervor for partners during the Macao, the Singapore tendering period and everybody fought whenever they can to line up the best of partners they thought could be made available. Now the partners will say they like to be partners, they think all I have to do is put up some money with you and their partner. They don’t understand how this industry is regulating. When they have to set put up a stack of application papers with personal histories of every member, their Board of Directors, of everyone of their subsidiaries. I think their appetite to be partners, that is to satisfy the other jurisdictions in which companies like ours are licensed. They may have to prove that they’re worthy in Singapore and in Nevada and when they look at the papers they’re going to have to file, I think they’re going to do an about face and march in the other direction.

Shaun Kelley - BofA Merrill Lynch, Research Division

Great, thanks. Thank you everyone.

Michael Alan Leven

Another thing I want to add Shaun in that situation, in the meetings in Japan we’re in a very favorite position, essentially about 22% of our non-gaming business in Singapore Marina Bay Sands has Japanese components to it, the visitors or meetings or conventions. We are very well known there and Marina Bay Sands is often talked as the model for what the integrated resort facility in Tokyo or Osaka would be like. So we’re in a very leadership position as far as having the opportunity.

Shaun Kelley - BofA Merrill Lynch, Research Division

Thank you, Mike. That’s actually really helpful.

Operator

Your next question is from Felicia Hendrix with Barclays. Your line is open.

Felicia R. Hendrix - Barclays Capital, Research Division

Hi, good afternoon. Rob you touched on this a bit before, but I wanted to get more granular, the mass win per table per day obviously continues to impress and you have surpassed the prior goal that you set to 12,000 win per table per day goal. And I see you shifted the chart a little bit in the presentation. So just wondering what’s the next benchmark there, what’s your timing to get there? And if you could just walk us through some efforts you’re making at the properties other than Sands Cotai Central to get to your next benchmark?

Robert G. Goldstein

So in the whole portfolio Felicia, which you’re talking about?

Felicia R. Hendrix - Barclays Capital, Research Division

Yes.

Robert G. Goldstein

Well obviously results have been excellent -- if our table game optimization in Macao, we’re really pleased with that. We dropped our rolling tables from 125 in Q2 of ’13 to about 402 currently. Yet we’ve increased our role, so we’re maximizing the role on the VIP side. We are very pleased about that. We are getting more utilization of the game, so obviously it's great. But the real story, as you know, resides in the mass side and I think the real story there is we've got about 1,100 tables. As you noted, we've exceeded our – our stated goal is 12,000 per day. The question now is how much far can we get and I think the real answer is right in the thoughts that we have about 9,000 keys on Cotai in addition to the infrastructural improvements in addition to the fact that our focus on that business is both and all throughout the mass portfolio. Not just the premium mass, the super premium on the pure mass, mass, I think there is where our advantage is well placed. No one else can compete on the pure mass side, so about 300 games right now. We're doing about 8,000 to 9,000 a day. As we grow that segment for all the premium mass and Dragon mass from 5 and 6, I don't know if we get to 13,000, 14,000, 15,000, 16,000, I believe we can. People were skeptical. We said we can grow from – we doubled Sands Cotai from 6 to 13. Venetian is a juggernaut, probably the most successful that's in the world today, 500 plus mass table games in excess of 12,000. Can we ramp the entire portfolio 14,000, 15,000, I believe we will. I can't say a timeframe, I can't say it is next two quarters, I can't say it's '14 or '15 but there's no reason to believe as we penetrate beyond Guangdong, as sleeping has become the biggest driver of gaming, we have that unique advantage with all those sleeping rooms. And as the infrastructure improvements, the cultural propensity to gamble, it all works in our favor. Our team there – Chris and I were there last week, the focus is completely on this segment and all three tiers of segments. So we're in the belief we can grow it. I don't want to put a timetable to mind. We brought 12,000. It was a pretty aggressive goal. It turns out we passed that. Next stop 13,000, 14,000, 15,000. Couldn't be more pleased with our progress, couldn't be more pleased with our ability to grow our Rolling win as well as our mass and we also believe there's one more hidden advantage, that is our real estate in both SCC and Venetian enables us to put more ETGs on the floor to talk to that table customer. We can't say the limits we're posting now. So we're in a very, very favored position. We feel very confident there's big growth ahead for us.

Felicia R. Hendrix - Barclays Capital, Research Division

Thanks, Rob. That's really helpful. And just as a follow-on, Rob, do you foresee the opening of the new resort on Venation having any kind of benefit in Macau this year?

Robert G. Goldstein

I do. I believe Venation is an extraordinary positive for us in Cotai. It affords more sleeping opportunities, more visitations. It's a one-off development for all Cotai. But again with our 1,500 gaming tables we're more advantaged. So all casinos are not equal. Those with more retail, more sleeping rooms, more gaming positions are more equal and we are more equal at Venation and SCC. So as the market brings more customers that benefits us dramatically. So I think it's widely positive for us, yes.

Felicia R. Hendrix - Barclays Capital, Research Division

Great. Thank you for the color.

Operator

Next question is from Steve Wieczynski with Stifel Nicolaus. Your line is open.

Steven Wieczynski - Stifel Nicolaus

Good afternoon, guys. So, Rob, you talked about – it was Singapore with that VIP market being pretty tough at this point. I'm trying to go out and identify more of those customers inside that region. Can you dive into that a little bit more? And then maybe what kind of conversations have you had with the government in terms of eventually allowing that junket structure to come into play there?

Robert G. Goldstein

Well, the junket structure, Steve, is not on the table. Let's be clear about that. We've not had conversations. We wait and listen to the government's advices and frankly that's not in discussion at all. So we breakout the Rolling versus non-Rolling, let's be real clear, we are really pleased where our non-Rolling business is going. We ramped to 4.6 again, came back in that dramatic low [ph] about six quarters ago. Couldn't be more pleased with what our team has done over there just developing the Jakarta based, Malaysian based, Japan based customer. We're seeing a real growth there on the premium side both slot and table. We're not seeing as much pure mass play. That play is disappearing frankly both Singapore and both us and RWS saw that low as a result of the government's approach. Going back to the premium side, look, we're very disappointed we can't seem to "play lucky" for the last year and half or so. We have total confidence with the best people on the ground looking at it and we will return to a 2.7, 3.0 range. However, I must caution you I don't believe there is going to be significant loan growth in Singapore in the foreseeable future. It's going to remain a pretty much flat market in my opinion. It's Mainland Chinese driven. We were maintaining our 60 billion or so year roll. We want to hope we get our (indiscernible) back to a good place. We want to focus on margins to grow a better yield, but really the growth is going to be in non-Rolling segments for us. The new opportunity to make money in Singapore resides in the non-Singaporean based premium, custom both slot and table.

Steven Wieczynski - Stifel Nicolaus

Okay. Thanks. And the second question, I know it's not an overly important market for you guys, but with Vegas your numbers there were pretty strong and what's your outlook into 2014 just in terms of that group and convention business?

Sheldon Gary Adelson

Our 2014 convention business is in very good shape, actually for Vegas. The convention business is really the best market we have at the moment. Rates are moving up a little bit in the convention area which is good. So I think you can expect a good convention here, probably one of the best here in Vegas.

Steven Wieczynski - Stifel Nicolaus

Thanks.

Operator

Your next question is from Carlo Santarelli with Deutsche Bank. Your line is open.

Carlo Santarelli - Deutsche Bank

Hi, guys. Good afternoon. Just really quickly on the Venetian and on margins there, it seems like this is the second quarter where commissions were a little bit higher on the VIP side than I would have anticipated and that obviously weighed on the margin a little bit despite clearly the higher margin mass ramping nicely at that property and across the portfolio. Could you guys shed a little bit of light on maybe what's going on, on the VIP side and the commission numbers specifically?

Robert G. Goldstein

Yes, I must say Carlo, to be honest with you any time you start to run for the $2 billion run rate, I'll take a lesser margin. We're now ramping that place. It's headed for 500 million a quarter, so we delivered it. We're really pleased with the numbers and I think to your point, the mass table is only the driver there. I'll say that the mix of business to Venetian both premium – we were mixing premium direct as well as VIP piece and the mix sometimes ends up affecting margins as the commission is paid. As you know, we had a structure there. It is both win based and volume based. So it's purely in the mix. There's nothing I'll sync [ph] with it. We made a lot of money in both the junket side this quarter as well as VIP premium direct. We feel very comfortable we're heading there, but again we can't – at the Venetian you can't argue those results. It might be the first property in history to post $2 billion of EBITDA. So the mix made from quarter-to-quarter vastly and may affect our margins vis-à-vis the growing segment. But I think in the idea that the margin at Venetian was up 37%, 38%, I feel pretty good about that.

Carlo Santarelli - Deutsche Bank

Great, Rob, that's helpful. And then if you don't mind just following up and that you mentioned a little bit of the premium mass and if we were to think about that in the old adage that you guys have talked about – obviously the power of that mass revenue dollar relative to VIP, as we layer in more of that premium mass business, should we be thinking about that relationship of mass revenue relative to VIP to EBITDA dollars any differently?

Robert G. Goldstein

You're talking Venetian now, right?

Carlo Santarelli - Deutsche Bank

Across the Macau portfolio also.

Robert G. Goldstein

Okay. No, I think we believe we're going to trade in the 45%, 46% margin across the portfolio on the non-Rolling segment. Clearly we have this ridiculous advantage of having lots of pure mass games run as much as 50 point margin on them but the blend will be in the mid 40s, probably higher than most. To your point we'll trade lower through the mass but still are seeing that reside in the 41%, 42%, 43%. The beauty of our portfolio is we're not super premium mass or premium mass dependent. We have lots of pure mass and that's where the margin will keep kicking up. So I believe we can grow our yield to hopefully, as a reference earlier to Felicia $14,000, $15,000, $16,000 a day blended and maintain a 44%, 45%, 46%. The Venetian story I think what's happened there, what has happened so favorably is we always have the mass business there. We started to develop with our premium mass and that's where I think it goes to it in the Venetian specifically. As we drive home that premium mass customer, use our (indiscernible), our room product, again I believe the Venetian is going to hit a $500 million quarter one of these days because the blend of that business, that's the only property in Macau based on all cylinders, all three portions of the mass segment, the junkets, the retail, it's a traffic machine, as Sheldon referenced, and it's got all the cylinders working. That is a juggernaut. And there is no reason in my mind that can't be a $2 billion store on a run rate sometime this year or next. But I'm very confident in maintain margin and keep growing our yield per table.

Carlo Santarelli - Deutsche Bank

Great, thank you. And then just one quick follow-up on Marina Bay Sands. And I know that Sheldon commented earlier on it. But when you look at the life to date at this property, I think there’s something worth 185 billion of total VIP enrollments coming through, and I want to say life to date hold that the property is about 8% below that theoretical level. Is there anything structural about your customers there or maybe it's betting patters, maybe it's tie, there’s things like that, that maybe should influence a lower hold. I remember being told one time particularly some jurisdictions play ties more and that rise hold up. But in this instance do you guys think there is anything structural there that we should think about or is it just a string of kind of less than fortunate luck?

Robert G. Goldstein

I spent hours last week in Singapore. We hired a number of experts to look at our mix of business and they, we pay people a lot of money to tell us what we already believe and that is structurally it's sound and it should be in the range of 2.7 to 3. I’m as frustrated than anybody, as a manager who is paid to create EBITDA, I found it very frustrating. I sat for four hour lecture from three very smart people. What they told me is you’re going to hold 2.7 to 3 and the only thing I can tell you Carlo, and I will tell you this. One, highly concentrated, the one mistake we made in Singapore is we should have built it inside of Mainland China with the border like L. But you don’t have as much pure volume as you have Macau. Two, you got people bet USD 1 million at hand, that’s creates volatility that is frustrating but valid. There, pairs and tie betting what you know drives the margin or Baccarat business. Some of our better customers don’t bet pairs and ties, we wish they would. But they are betting it less and that’s a wise gambling choice and so that’s impacting it somewhat. Having said that any aggregate, three very smart experts along with Andrew McDonald sat there and lectured me and I listened very carefully and I walked away saying, trust me, we should be holding 2.7 to 3, be patient and keep taking all the action. And that’s all I can tell you. There’s nothing structurally wrong. We have to keep our head down, keep bringing the business, be margin focused and watch the return go better today. We saw this year’s ago. When I was young we used to watch Caesar’s Place go through this. Here’s a very, very volatile highly concentrated very high bet. We got over a 100 guys who bet huge amounts of money each quarter. One of these days we’ll give you guys a 4% quarter and all this will go away. Unfortunately this is not that quarter. So bear with us and watch Singapore perform.

Carlo Santarelli - Deutsche Bank AG, Research Division

Yes for sure, Rob. Thank you very much. That was really helpful.

Operator

The next question is from Cameron McKnight with Wells Fargo. Your line is open.

Cameron McKnight - Wells Fargo Securities, LLC, Research Division

Good afternoon, thanks. A question perhaps for Rob; and just a follow-on from Carlo’s first question. On the premium mass side of the market in Macau, as premium masses are turned that, we’re hearing a lot of operators hear them talk about now. Are you seeing any signs that, that segment is becoming any more competitive on the fringes?

Robert G. Goldstein

Yeah, surprisingly I am not. It's a great question. It's a very valid one. I asked that of adding the team all the time and in fact they were not seeing it. The market is so fluffy and so rich that everyone is participating. I’m fearful about the margin erosion, but thus far we haven't seen that. The customer still seems more focused on the environment. We played some wonderful environments to gambling, obviously service, obviously room product. I was at the Four Seasons last week watching rooms full of these guys betting huge amounts of money, and I was mesmerized by the amount of people there the whole week betting huge amounts of money, having fun. I don’t see it. So fortunately the markets remain rational. There is so much good business in Macau it's such a staggering market that it’s very appealing to any operator. So far, I have seen non this cleanest I have seen in other markets in the last 35 years. So the answer respectfully is no. We're seeing lots more business and maintaining margins.

Sheldon Gary Adelson

That’s a very interesting question. There were two indicators that provide a predictable prognostication. It's tough to prognosticate, particularly about the future. The first one is, we run from 1.3 night’s average stay to 2.1 in less than a year. What does that mean? The second item, what it means is the second item which is that people who’re traveling from further away and we have an upside potential of that when the Hong Kong-Macau-Zhuhai Bridge opens in 2016 and that we see now more and more people that are coming from further away and when they do, they bring more money and a higher gaming budget. So it's evident by the 2.1 night’s average stay and the infrastructure is bearing fruit that people are coming for a longer stay and when they do that they bring more money and when you do that you increase the premium as on a predictable basis. You’ve hear Rob mention that we’re a Dragon Master. The Dragon Master is what somebody had a nightmare and called, he called the space that we’re building in Lot 5 a premium mass space.

Robert G. Goldstein

I suppose that’s a good name, Dragon Master.

Michael Alan Leven

(Indiscernible).

Sheldon Gary Adelson

Would you go for a (indiscernible). So those are the indications. The expansion of the infrastructure to bring people from further away and the promise of more of that. Do you know when you open that bridge, 180 cities will be serviced by the airport that’s only 20 minutes from you, serviced by over a 100 airlines. So, as people -- somebody before asked the question about, is it going to be too crowded when everybody opens up. As I said, I think it was [Jon Oh] [ph]. We’re in a supply driven industry. And we could see by the indications that the future looks much by that and it's predictable and reliable than it is today.

Cameron McKnight - Wells Fargo Securities, LLC, Research Division

That’s great, thanks. And Sheldon as a follow-on with the bridge opening in 2016 and linking Macau to Hong Kong International Airport. Do you think that will really and perhaps finally give Macau a leg up in the convention and exhibition business versus say for example Hong Kong which is far more accessible for international travelers?

Sheldon Gary Adelson

Yes. It's accessible only because of the airport.

Cameron McKnight - Wells Fargo Securities, LLC, Research Division

Yeah.

Sheldon Gary Adelson

And if that airport essentially is right in the middle between Hong Kong and Macau, then it will substantially increase the viability of the convention and exhibition market.

Robert G. Goldstein

That Cameron, that’s the biggest objection now from big groups and big conventions in terms of having to fly into Hong Kong and take a boat. When that objection gets removed with our MICE capability in the Cotai Central as well as at the Venetian, we stand in the major position to benefit from that MICE activity which is mid-week business which is the opportunity area a significant improvement continually.

Cameron McKnight - Wells Fargo Securities, LLC, Research Division

Great. Thanks very much.

Robert G. Goldstein

You’re welcome.

Operator

The next question is from Robin Farley with UBS. Your line is open.

Robin M. Farley - UBS Investment Bank, Research Division

Great, thanks. I wonder if you could comment a little bit more on Singapore. I know you mentioned that you expected to say that USD 60 billion level, but just looking at Q4 and I guess it's the lowest volume in the last two years and how you get comfortable that that’s in the range of normal and that there are still USD 20 billion quarters coming that related to a number of events held that makes you comfortable that ’13 is not where it's moving towards rather, but it's going to stay at that USD 60 billion a year?

Sheldon Gary Adelson

Robin it's something closer to convertibility on the Yuan and inflation. They’re both going to continue to an increasing gross role.

Robert G. Goldstein

I think those factors, coupled with the fact that -- you’re right, it’s a light quarter compared to the 18.2 in the first quarter last year or even the 14.4 we did Q2 of this year. I guess my answer is Robin, its super concentrated and two more guys, three more guys, four more guys show up, it's a billion dollars of role. I wouldn’t take too much stock and the fact it's a light quarter, yes you’re right. But we can easily do 70 million, 80 million which puts right back a normalized run rate of 60 million. I think 50 a quarter blended for the year is a realistic estimate. (Indiscernible) off by here and there, a quarter it was up to 18 and down to 12, yes I could. But I think in the end of the day it's -- if you want to be super conservative, drop it to 55, 60 blended for the year, I think you’re very safe. I’m more focused on the margins and the whole percentage right now because I don’t think a significant growth beyond that right now. But to your point it was a weak quarter and there’s no denying that, but we had 18.2 quarter a year-ago and I wouldn’t be surprised to see the first quarter pop that number again. It doesn’t take a lot. We’ve got some special events coming on the horizon. David Beckham shows up, it makes a difference. So I’m not that concerned that we can pop the numbers in Singapore. I’m more concerned we can hang on to the money and we can maintain a margin to drive our EBITDA back to 1.6, 1.7 run rate.

Robin M. Farley - UBS Investment Bank, Research Division

Okay, great. Thanks. And then I think can you give a little more color on kind of the approval process for the apartments in Cotai. It sounds like you’re going to be actively under construction there and just if there is any approval needed for the sales?

Sheldon Gary Adelson

No, we -- you’re going to (indiscernible). No, we’ve gotten there okay from the government of Macao to proceed with the St. Regis Tower. We have gotten okay to monetize the -- through the co-op basis for the four seasons. However, they have not have any experience with the legal infrastructure and we’re sending in to the counsel of the community, the general counsel of Macao, we’re sending in knowledge and experience from the major co-op market in the world, that’s New York City. We are having the law firms acquaint them with the structure. So their lack of familiarity with the structure is holding back their okays for little things. But we expect in the near future that should resolve itself. And they knew that I wasn’t going to build the St. Regis until I got the okay for the four seasons and now we’re building the St. Regis and we will have it ready before the end of ’15 at or about the time we’re going to have the Parisian open. And again, we’re just adding to our -- to the most precious commodity there and that is the room supply.

Robin M. Farley - UBS Investment Bank, Research Division

Okay, great. Thank you.

Operator

Your next question is from Harry Curtis with Nomura. Your line is open.

Harry Curtis - Nomura Securities Co. Ltd., Research Division

Hi. Just a quick question for either Sheldon or Rob. You talk a bit about the license renewal, the concession renewal process that initial discussions in Macao could begin in 2015. How do you expect that to go?

Michael Alan Leven

Hey Harry, its Mike. I will answer for the -- since you didn’t ask me. The answer is simply secretary [Tam] [ph] made that statement about six or seven months ago about 2015. We had no further information whatsoever as to whether it will start, whether -- where it will go or what have you. And you hear rumors all the time, but basically there is absolutely no factual information coming out of the secretary or anybody else at this point.

Harry Curtis - Nomura Securities Co. Ltd., Research Division

There are some thoughts that …

Michael Alan Leven

(Indiscernible), sorry.

Harry Curtis - Nomura Securities Co. Ltd., Research Division

That’s okay. There are some thoughts that an additional license could be issued or two, do you buy that?

Sheldon Gary Adelson

No. There is no reason to buy or not buy actually. I mean at this point of time, it wouldn’t look to us that there would be anything and you don’t know -- you really don’t know and for anybody in your end or ours to make a speculation. The only thing we know is that more emphasis is going to be put on integrated resort type facilities with more non-gaming facilities for operators. You’re seeing some of the guys talk about that in the new buildings as we build. And that’s the one, that the government continues to talk about putting more emphasis on Macao for that kind of situation. That’s the only really factual situation we know.

Harry Curtis - Nomura Securities Co. Ltd., Research Division

Okay. And just my last question is, are there any direct investment opportunities for your company on Hengqin?

Sheldon Gary Adelson

There has been conversations about direct investment you see that Pansy Ho and some of Galaxy working in that area. We’ve had some conversations about leasing some space for office space things of that kind, but no direct financial, no direct conversation about anything where there was actually a financial investment other than that.

Harry Curtis - Nomura Securities Co. Ltd., Research Division

Okay. That’s it from me. Thank you.

Michael Alan Leven

Thanks, Harry.

Operator

There are no further questions. Ladies and gentlemen, thank you for your participation on today’s call. This concludes today’s conference. You may now disconnect.

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