Las Vegas Sands Corp.

Good afternoon. My name is Katrina, and I will be your conference operator today. At this time, I would like to welcome everyone to the Las Vegas Sands Fourth Quarter 2020 Earnings Conference Call. All lines have been placed on mute to prevent any background noise. I will now turn the call over to Mr. Daniel Briggs.

Thank you. Joining me on the call today are Rob Goldstein, our chairman and chief executive officer, and Patrick Dumont, our president and chief operating officer. Also joining on the call are Dr. Wilfred Wong, president of SANS China, and Grant Chung, chief operating officer of SANS China. Before I turn the call over to Rob, please remember to 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 and the most comparable GAAP financial measures is included in the press release. Please note that we have posted supplementary earnings slides on our investor relations website. You may return those slides during the Q&A portion of the call. Finally, those who would like to participate in the Q&A session, we ask that you please respect the request to limit yourself to one question, one follow-up, so we might allow everyone with interest the opportunity to participate. Please note that this presentation is being recorded. With that, let me please turn the call over to Bob.

Thank you, Dan. Good afternoon, everyone, and thank you for joining us today. The last two weeks have been the most difficult in our company's history as we mourn the loss of our founder, Sheldon Adelson. Sheldon, as you know, was a visionary. He led the transformation of not one, but three integrated resort markets, that being Las Vegas, Macau, and Singapore. He authored the Mike Space Integrated Resort Model in Las Vegas. He pioneered the development of the Code Tie Strip in Macau and reimagined the skyline of Singapore with the iconic Marina Bay Sands. His audacity to challenge the status quo transformed entire markets. In Las Vegas, Sheldon originated the convention-based integrated resort model when no one, and I mean no one, would believe in its viability or sustainability. Today, Las Vegas conventions are synonymous. In Macau, it's easy to forget how Sheldon's vision for Cotite defied the consensus thinking at that time. Every element of Manish Macau's questions are the skeptics, and I mean every element. A 3,000-room all-suite hotel when the overnight tourist market almost didn't exist, existing hotel inventory was very limited, the Grand Canal shops with over 300 retail stores in a market that had virtually no retail, a 15,000-seat arena and 1.2 million square foot convention center he dreamt big but he also delivered he developed a critical mass of world-class integrated resorts at record speed before others don't even dare to dream he completed the nation account in 2007 in only the fifth year of our company's 20-year concession his determination pushing forward diversification and investment in non-gaming account was unwavering and breathtaking to be part of. Our total investment account today exceeds 15 billion US dollars. You know that Sheldon is a big believer in a strong, healthy, and cordial US-China relationship. He believed it was to the benefit of both countries to maintain a bilateral relationship based on mutual respect. The company, the board, and the family are absolutely committed to continuing Sheldon's efforts in this regard. Sheldon is irreplaceable as the visionary founder of our company, of the unmatched portfolio of integrated resort assets, and the management team he assembled to operate and expand the business in the future remain here in place, ready to work. The DNA of the company that Sheldon founded will remain ever present. The company, with the full and wholehearted support of the board and the family, will continue to honor Sheldon's vision to protect and enhance his legacy. We look forward to the future due to a lot of confidence and optimism. While the pandemic continues to impact our business reversely, we have achieved positive EBITDA in both Macau and Singapore in the fourth quarter. There's no doubt in my mind our business will rebound to pre-COVID levels in the future. In Macau, the Grand Suites Four Seasons is now open. And the first phase of London Macau will officially open in February. We are very excited about the progressive unveiling of a London Macau throughout the course of 21. Seeing as China is well positioned to capture the rebound in tourism when the pandemic finally does subside, We've always believed there's no better market for our company to invest in than Macau. We will continue to invest in our resort product, nurture our local talent, and, of course, support the local community, which we are grateful to. In Singapore, we've remained very committed to long-term investment in renovation, including both the upgrading of our existing facilities and the expansion of that property. On a personal note, I spent more than two decades with Shelton and had both the fun and pleasure of working for him with Shelton. He was a great mentor. He was a great friend. And I guess what speaks volumes about his generosity and decency is reflecting his decision to continue to pay our team members, even after the pandemic, dramatically impact our business. He was adamant that team members continue to receive pay and health benefits, even while we're closing our buildings. It was abundantly clear that our business would be hampered for quite some time. In the days since his passing, we received condolences from around the world, from global leaders, elected officials, business partners, investors, customers, and many of you joining us on the call today. We are touched by the outpouring of support, and we really appreciate that. I am honored to have been invited by the boards of Las Vegas Sands and Sands China to become the chairman and CEO of both companies. With the full support of the board and the family, I will work hard with our outstanding team members, the management team, to fulfill Sheldon's extraordinary vision. I am confident, as Sheldon was in 1995, this company will go from strength to strength in the future. One final thought before we turn to questions. I look forward to the day we can say, yay dividends. I think we're ready for questions.

Ladies and gentlemen, if you have a question at this time, please press the star and then the number one on your telephone. First question, sir, we have Joe Graf from J.P. Morgan. The line is open.

Good afternoon, everybody. Before asking questions, I just want to offer my condolences to all of you, as well as to Sam and Rob and Patrick. You were obviously particularly close, so it's a big loss, and he truly was one of a kind. Thanks, Joe. We appreciate that.

Thank you.

So my question and my follow-up focus on Macau, and when we kind of look back at what's transpired with tourist invasions from mainland China into Macau, it's obviously been more slow. The progress has been more slow than maybe what all of us anticipated, though it has shown some progress. Other than the government having this intentional gradual easing of visas to obviously dealing with this little tiny thing called the global pandemic, are there any other policy issues or things that are maybe weighing in on visitation other than just simplistically visas are kind of being granted in conjunction with infection rates and vaccination rates and the like? And when you talk to folks in China, what specifically are folks looking at or metrics and improving metrics to sort of see a further easing of tourist visas?

We're fortunate to have both Wilfred and Grant McCollum and asked them to address that question, gentlemen.

Yeah, Grant, do you want to talk about it?

I want you guys to, you take it. Yes, please. Grant and Wilfred. Yes.

Yes, good. Good afternoon, everyone. Yeah, I mean, Joe, I think following the resumption of the visa issuance from late September, the business volumes clearly did rebound during the fourth quarter. And the recovery was led primarily by premium mass and luxury retail. I think both segments actually did show good momentum throughout the quarter. So in December, we had a very encouraging month, especially the holiday season. We reached over 50% hotel occupancy during the month. And there were the peak days, we were achieving 8,500, 9,000 room nights, which obviously we haven't done anywhere close to that since January. And if you look at the pace of recovery in retail, the luxury retail sales really took off during the quarter. And by December, Four Seasons Retail Mall was up 16% over the prior year. Actually, we had the best ever month that we ever had in Four Seasons Mall tenant sales. So that's pre and post pandemic, a record month. So an issue here is what you reference. There is just not sufficient visitation to power all segments of the business and to replace the volumes that we lost. So the base mass remains very subdued. Macau only had 20% of the prior year's visitations during the fourth quarter. So Really, there's not a lot you can do about that. It's not a policy issue in the sense of they can do something now that they would not otherwise be doing in light of having to prioritize the control of the pandemic. And obviously the authorities have done an excellent job in that regard. So what you have to remember is that during the fourth quarter, the number of many outbreaks, local cases in different provinces and cities in China And in October, November, they were relatively muted. And even for the first half of December. So the number of zones or districts that were classified as medium to high risk from a COVID perspective were relatively few. But from about, you know, let's say third week of December, the domestic cases started to rise in northern China. And what we saw was that a lot more districts, a lot more zones, and sometimes whole cities were classified as medium to high risk, which immediately obviously puts a brake on visitation from those affected zones or cities, but also the overall narrative and travel advisories related to COVID becomes obviously a lot more cautious. And that impacts forward bookings. So from about middle of December, where up to that point we were getting very positive momentum in terms of forward bookings in January and obviously into Chinese New Year, obviously things have started to moderate from a forward booking and a pace of new bookings and obviously the increase in cancellations. So that is directly related to the trending of the pandemic and some of these isolated outbreaks that we've seen, particularly in the northern provinces. So with that in mind, it's not easy to see relaxation of the current guidelines in terms of travel.

That's helpful. And then I have a follow-up, just I guess more on sort of me continuing this idea of Macau policy. Maybe this is a question for all sort of anybody on a call can answer, but do you think either Macau or the central government in Beijing want mainland Chinese companies getting involved with Macau casinos, either existing by an existing state or having board representation as You know, is this something that's a priority for the government or important? Have there been discussions? And I kind of remember hearing something along these lines maybe a couple of years ago as this potentially happening on the ground in Macau a couple of years ago. But we're getting, you know, more questions and commentary on that of late. So anything you can shed on that would be interesting. Thank you.

Wilfred or Grant or Patrick, you want to jump in on that?

Yeah, I think obviously we have not been told of anything at this stage. Consideration is now being given to what the conditions should be for the new concession. We have not picked up any, nor have we been consulted on whether there should be participation of Chinese companies But we have to bear in mind that Chinese companies are unlikely, I mean real Chinese companies, are unlikely to take part in gambling, which in China is considered not legal. So there were in the past some suggestions of people saying state-owned enterprises might come in. I don't think this is really in line for their policy consideration. Whether private Chinese companies would be allowed to participate in Macau and under what circumstances, these are things that have not been broached to us at all. So the only thing can say at this stage is that we will continue to do our best in Macau and showed that we are a locally rooted company because we're listed on the stock exchange in Hong Kong so we are we're just the same as any Hong Kong company and that we do everything even better than than other competitors

Joe, can I just jump on Wilford's very, very thoughtful comments? We've been going to Beijing for around 20 years. in Macau and having endless meetings. I know there's an outsized belief by some people who write these things, and they constantly opine their thoughts on how equity should be sold to Chinese companies, and they're jumping up and down. I've never, ever had a conversation with one person who mattered, who ever said that to me, or even made that comment. In fact, if anything, they kind of chuckle, because to Wilfred's comment, there's not a big appetite to invest in gambling. So I think there's, I know it's very prevalent in the market. I hear it quite a bit. I know somebody wrote something recently about how we can guarantee our licensure if we sell, you know, X percent. It all sounded very good, but one thing, no one's ever said that in the government to us. Never heard that from anybody who actually understands how Macau and Beijing operate. In fact, I think what we do here is complete affirmation of what Sheldon has always done, which is invest heavily. Invest heavily in non-gaming activities. Believe in Macau. Support your employees. and think big and grow. That's been the exact direction for at least the last five years. And before that, we heard more from the Macanese officials. We've never heard them say, hey, you've got to sell steak to Chinese people. Or we've heard, please support your employees. Sheldon did that to a T. We paid everybody through the pandemic. It cost a lot of money. We did it. Invest in the cow. I think Sheldon, we've covered that one already. already, $15 billion, invest in non-gaming. That's always been a direction, but not one time from no one I've ever heard, oh, you got to sell equity. I only hear that from these people who write these columns or have a belief that they understand the thinking over there. I did once meet with a very, very good person, very important guy in the Chinese world, a businessman, and I suggested that to him. He started laughing. He said, no one's going to buy into a Chinese gambling company, whether it's Macau or Las Vegas, because that's not what we're going to do. He found it kind of humorous, actually. So I know that's a common prevailing thought, but we don't hear it. Great. Thank you, guys.

Next question. We have Carlos Santorelli from Deutsche Bank. Your line is open.

Hey, guys. Thank you for taking my question, and I echo Joe's sentiments about the recent loss.

I want to just thank you for your kind note to us. We appreciate what you wrote. It was very kind and thoughtful, and we really appreciate it. Thank you, Ralph.

If I could, just very simplistically, to the best of your understanding, how should we expect the concession renewal process to actually get moving? And what do you guys foresee as the timeline to when potentially we can start to see some announcements as to the process and the timeline for the process and et cetera, just in its simplest form?

I'm going to turn back to the fellows in Macau. I think they're best suited to answer your query.

Wilford, Grant, help us. Yeah. We are as eagerly waiting for the government's direction because, as you all know, we only have about 17 months left. left before the concession expires. And we only know that the government is adopting a process which includes public consultation on the performance of the concessionaires. and the targets of achieving diversification, that amendments to the legislation has to be introduced into the Legislative Council, and then the bidding process begins. So it's a very tight timetable that we are running against. We also know that there is a Legislative Council election scheduled for September this year. So all these are coming into play and we are coming up against a very tight timetable. We don't know whether this will begin very soon because right now the government is all embroiled in the fight against the pandemic. As we all know, Macau cannot afford a single case because It was a public announcement by the government that if there is even one case, Macau would be locked down again. So the government is putting all their energy into the fight against the pandemic to ensure that visitors can continue to come. We don't know. The short answer is we don't know. And when asked about this publicly, the chief executive said that anything is possible. I think he was asked whether there could be an extension or how soon can this be done. And his response was anything is possible.

Great. Thank you very much. That's very helpful. And then just as a follow-up, obviously last quarter you guys talked a little bit about the Las Vegas asset potentially being open to entertaining offers to that asset. How much, Rob or Patrick, does that influence potentially the timing of the return of the dividend, or do you think more about the dividend from the lens of when Macau is back and Marina Bay Sands is back doing what they do, you'll be able to kind of re-institute that.

Patrick? Hi, it's Patrick. So a couple of things. You know, we have a very positive view of Las Vegas. I think long-term, it's irreplaceable in terms of a tourist destination. Huge amount of investment going to Las Vegas. We think there's a huge amount of potential pent-up demand. Just looking at other markets, when there's been a return, And really, the restrictions in Las Vegas now are based on the capacity constraints set by the government. On weekends, we're actually doing quite well. Their days were actually almost at 2019 slot levels. It's really an interesting thing to see, and I think we're very positive on Vegas outlook. just generally. That being said, if there is a completion of the sale process, it's independent of the dividend. I think the key thing for us is that we need to see a return to operations. We've had this discussion before on prior calls. We need to understand what the cash flow trajectory of the business is, the growth of that cash flow trajectory. You've heard Grant mention the completion of some of the Londoner milestones. That's a phenomenal product, and we believe it will be very cash flow generative in the quarters and years to come as it addresses our most profitable and powerful segment of Macau. So the way we'll look at the dividend is evaluate our cash flow trajectory and the profile of business. and then make an assessment about how to restart it and sort of what the trajectory of that dividend would look like. But we're very focused on the return of capital. We think it's been fundamental to our shareholder return story. We think we have a growth component in our key markets. We have a growth component in new growth opportunities and new developments. And I think, you know, as part of that, we look very heavily towards the dividend as our cornerstone and, of course, their share of purchases as well. So we're very focused getting on the other side of the pandemic. Hopefully we'll see some positive in the upcoming quarters. We have some green shoots in Macau. We have some positive results in Singapore and some positive results in Las Vegas here. And so I think over time we'll have better visibility into the trajectory of the business and they make an assessment of the timing and the size of the dividend.

I just want to follow up with Patrick. There's one other issue with that, and that is the return to Las Vegas. There's been recent commentary. It's been fun to read about how Las Vegas will never return to pre-pandemic levels, the best days behind it. I've heard all this before the last 20, 30 years about this town is right now on the back foot. There's no question about it struggling. But you can't help but think, you know, the missing, whether it's the vaccine or whatever it's going to take to fix this problem someday. I, again, want to reassert that we believe Las Vegas has plenty of guests and tanks. Our demand for 22 to 27 convention is unbelievable. Our customers want to come. And we remain very bullish on the return of Las Vegas. It may take as long as we want it to. It may take, by the end of this year, we'll see visitation spike. Please don't be among those people who have these ideas that this pandemic could put a hole in Las Vegas. It's just the opposite. The demand will be there. This is a unique town. They can have all the digital products out that you want. People want the visitation, and this town has a lot to offer. So we remain very bullish on the return post-pandemic.

Yeah, for sure, Rob. And thank you for that. And obviously, I know a lot of us on this call are looking forward to making our next trip out there. I know I am. So thank you guys very much.

Looking forward to having you. Looking forward to having you.

Next question, we have Thomas Allen from Morgan Stanley. Your line is open.

Hey, and let me also send my condolences to you and the entire LVS and Allison family. Mr. Allison was a true visionary, and his successes will never be forgotten. Thank you.

Thank you for coming.

So there have been a number of reports in the media over the past few weeks and months about you looking into sports betting and online gaming opportunities. Can you just discuss your strategy there in a bit more detail?

Sure. We're looking at a few opportunities, a multitude of opportunities, both regional and U.S. And, yes, we've looked at digital. And it's interesting. You can't deny that what's happened in digital is quite a space. And we are exploring opportunities, looking at what might be out there. But the caveat I have is nothing to report today. There's nothing concrete. We're simply looking, learning, observing. And just there's been some commentary that, you know, it's my suggestion. I want to assure you that Sheldon, this is another – Joey Arias-Sheldon, who he was ethically, he understood digital maybe too well before I did, and he believed in it. He just simply had this outsized ethical concern about people couldn't afford it or people that were too young to use it, and he wasn't a believer in the technology could stop that. He never questioned the viability of it. He questioned the ability to police it properly. And so the same way he paid people hundreds of millions of dollars last year because he wanted to, It's an ethical consideration to Sheldon. So we've had this discussion prior to his passing, and we are going to explore it. And again, the caveat is we are in the making money business. There's a way to make money. It's intelligent and prudent. And again, Sheldon would be in the room saying, I'm laser focused on returns and growth. As you know, his middle name was G for growth. He would have loved the opportunity, whether it be in the U.S. or abroad, to build more things. And we're not leaving the U.S. where we want to build. We've been all over the paper looking at different markets. So, yes, digital is in the multitude of considerations. We are learning and we're observing and talking to people. We are nowhere near a decision on that. And we will keep you apprised if something changes.

Thanks, Rob. And then just talking about U.S. developments on the brick-and-mortar front, there's been some chat about New York and Texas. What do you think the chances are of those states? And then, you know, how would you like to be positioned in those markets?

Well, we've been looking at New York for, I think, about 100 years, it seems like. I don't think it's any secret that we're big believers in New York. We think it's extraordinary, the density of population, the ethnicity. Look, it's a very good opportunity for anybody. And you can see, I think it's close to $2 million right now just in the facilities that are there without table games or decent rooms. And really a very good product. A good product there would be extraordinary. So we're definitely in the hunt. We've been pushing it for, again, for four or five years. We're excited by what came out of the New York group last week in terms of what they are considering. There's an RFI out there. So we're deep in the hunt and looking seriously at New York on a whole bunch of levels. And it's still a long way to go before we understand where they want to build and what they want to build. But we are going to be bidders. If it's real and it's done properly, we think the returns could be Sheldon-like. okay so that's interesting uh texas obviously extraordinary market we're kicking the tires down there too and another extraordinary market you can't deny the power of texas the size and scale and i was there last week and it was a fascinating couple days and again we'll we're having conversations we're looking kicking the tires and we'll advise you when something emerges from texas it would be a green casino market for land-based or whatever it could be a huge opportunity so we're that we, with our balance sheet, our strength, we would jump on both feet if it was the right structure.

Thank you.

Next question, we have Robin Farley from UBS. Your line is open.

Great. Thanks very much. And just echoing everyone else's thoughts about how sad it is to have this call without Sheldon. Thank you, Robin. Just a follow-up question. related to the sale of the LDS assets, the Vegas assets. I mean, not specifically to the dividend, but just kind of how much of a priority it is. Is it, were you just kind of, you know, answering an incoming call or is it something where you see, you know, that there may be some strategic reason why you would sell those assets, I guess? Thanks.

Patrick? So, you know, I think from our standpoint, we're very returns focused. So as Rob just mentioned, we're always looking at new opportunities and always looking at our portfolio to see how we maximize shareholder returns. And so, you know, as an entrepreneurial company, you know, we're always active. So I think, you know, I think we should just look at this as if there's a way to maximize shareholder returns, we're going to do it. And, you know, we constantly look at the assets that we have in our portfolio. We look at new growth opportunities, as Rob just mentioned, and we talk about them. You know, this is something our team is very focused on. So that's really how we think about it.

I guess if I could push a little more, I mean, I guess what kind of appetite did you sense? You know, you sort of publicly confirmed it, which maybe would invite some interest. What kind of appetite? And you mentioned, you know, being returns-focused, but almost anything that you would be interested in, you know, New York or Texas or other places would, you know, be kind of project-specific financing, right? So it wouldn't necessarily, you don't need the capital to free up to sort of put it to use in any other market. So I guess just trying to think about, you know, what kind of, in this environment, you know, what kind of appetite you think there may be for the assets? Thanks.

So, you know, I think there's a couple of different questions there. So, you know, first off, I think the way we think about our portfolio is, you know, we sort of evaluate projects on a case-by-case basis. So, Las Vegas is a standalone entity. We've operated it for a long time. We think it's a great asset. We think it has a great future. So, obviously, we're focused on operating at this point. I think in terms of if we have additional capital to deploy, as you know, we have an expansion opportunity in Singapore that we're very focused on. And we think Singapore is just a very special market. It's privileged, the fact that we're there. We love Singapore and think the future for Singapore is very strong, both as a leisure and business tourism market. And we're happy to have helped the government there support its goals and continue to invest there. So we have capital that we could deploy there in the near term. I think in terms of other opportunities, you hear some of the things that Rob's talking about. We also have return of capital consideration. So for us, capital allocation is front and center. We have these discussions with the management team of the board all the time. So it's something where we'll look at our opportunities, look for a way to maximize shareholder returns. If we have assets where we think our returns are increased by transacting, we'll transact. And otherwise, we'll look to the sort of historical actions that we've taken in order to enhance returns. In the near term, it's also helpful to have additional liquidity, right? So I think from our standpoint, as the pandemic recovers, it's nice to have additional liquidity on the balance sheet, which is the reason why we're running the amount of liquidity that we have today. We want to make sure that we have the opportunity to do whatever we need to do during this sort of unprecedented time. So I think from that standpoint, that's kind of how we think about things. I hope this answers your question.

Robin, just to piggyback on Patrick, one thought, and that is obviously we have a very strong balance sheet, whether we sell Las Vegas or not. But we also have, I believe, in the next couple of years, as you know, 2019, we did about $5.5 billion of EBITDA. I know these miserable years of 20 and perhaps even 21 make that seem like a distant memory. We think it comes back. It comes back strong. But also, I believe when Macau makes its decision, there's going to be a requirement to invest more in Macau, which, as you know, Sheldon felt, well, I can't wait to invest another $5 billion, $10 billion. That's a very, in my opinion, when the Macanese government makes its decision, financial capital investment, which we know exactly what Sullivan's doing. That was a bet with both hands. And that may be something else you think about. There's just no place like Macau. I think Grant and Wilford gave you a sense of London and Four Seasons. I hope we can all visit and be there this year to see what that team has achieved. But we're not done in Macau. We've been there for many more years. And When all this gets away, goes away, probably later this year, next, whenever, I don't know. I'm not going to predict because I've been wrong before. I won't be wrong again because I won't make a bet. But I bet one thing will happen is the Macau government is going to necessitate that licensees make investments in Macau, and we want to be there, be ready. Patrick referenced Singapore. I mean, these are not small investments. They're in the billions of dollars. So I think we have to be prepared for outsized investments in our best markets, which are Macau and Singapore, for crazy growth. And then there's other possibilities in the U.S. we referenced. So as strong as we are, if we can get stronger, we will.

Okay, great. Thank you very much. Thanks.

Next question, we have Stephen Gramblin from Goldman Sachs. Your line is open.

Thanks for the question and condolences to everyone on the line. Thanks, Stephen.

Appreciate it.

This question is on Singapore. Absolutely. My first question is on Singapore, which has continued to be remarkably resilient. What are you learning from the recent results about serving domestic crowd that might inform your renovation plans? And does this make you more confident of potential ROI on these investments? Or will that ultimately require full recovery in China consumers?

Well, firstly, we found out that Singapore is remarkably resilient. You're right. And the stock business there is actually not quite at pre-pandemic levels, but it's getting close. So we've learned that there's a local market, but more important than the local market, frankly, are the outsized contributions of foreigners who are residing either during the pandemic or full-time in Singapore. We get a lot of strong play inside the country from wealthy people that want to gamble, and that's a very positive sign. You saw the numbers, you know. If we can run... even though it's not the billion seven we used to be at, nor the two, three, or four we'd like to be at, it's still a run rate of half a billion plus dollars in the most dramatic times. All it does to me is reinforce just how damn powerful Singapore, how wonderful the asset, and frankly how wonderful the government is to work with there in terms of their They're so willing to talk and work with us, and we're hoping to get actually over there in March to continue our discussions on how to get phase two going. But it reinforces the enormous size and scale of that market, and to think about having no foreign visitation yet make that kind of money and perhaps even more, it's very encouraging. On the flip side, it also makes you realize how important the airlift is. It's an island. It's hampered by the fact, unlike Macau, which could open the doors up if the government so chose and relaxed the visitation requirements. In Singapore, the government is eager to open the doors, but it necessitates airlifts, which means counterparty trading with other governments, other airlines. So we don't see it coming back in the short term. I think it stays in this $150 million a quarter or so level. And so there's no real growth opportunity, I think, to see it until this issue is resolved. But it certainly makes us very much want to invest in Sanford. It's a great place to do business. It's a great market. Obviously, we need the return of all consumers, foreign consumers, to enhance it. But do we want to invest money in Sanford? We sure do. We sure want to get our product better. We have a lot of work to do in the building right now. We're actually embarking on an ambitious reinvestment program in the current asset to bring up to a better standard. And then we want to build our second phase so we can resolve everything. So we're, just like Macau, we're lucky to be there. And the idea that we can do $5-plus billion post-pandemic is pretty encouraging. Can it be more? We think it can be a lot more, yes.

And maybe a follow-up on digital and iGaming, and I realize it's still early, and you said you've been studying the industry, but are there any initial thoughts on what you think the company can bring to the table different than the existing players?

I have very strong thoughts about it, but I want to talk about them at this time. I want to keep working towards our goals, which is understand it fully, complete the conversation, and frankly, the tutorial we're undertaking to really understand how to get there. It's a very interesting business, as you know it, it doesn't make a lot of money but it sure has great valuations the question is can we bring up something to table and make a lot of money and we're working through it and we're exploring it's best i can tell you we have something of concrete to say to you we'll certainly call you but right now it's simply exploratory the same way we explore a lot of things all the time you know you saw thailand I think someone came out about the possibility of an opportunity to hire in Thailand. We're exploring that as well. So everything is up for grabs. I think we look at our company, you know, the balance sheet enables us to have a very curious appetite to grow. And, again, we're going to adhere to the founders, you know, Gary Groth Adelson. He believed in it, and we're certainly going to hear that. I think you'll hear some things from us hopefully in the next 12 months that will make you believe in that idea. That's great. Thanks so much. Thank you.

Next question, we have Sean Kelly of Bank of America. Line is open.

Hi. Good afternoon, everyone. I also want to offer my condolences to you, Rob, Patrick, to the whole Adelson and Las Vegas fans' families.

Thank you. Appreciate you, Sean. Thank you very much.

So I guess I'd like to maybe turn back to Macau for a quick minute, if we could. You know, I think Grant's comment to start off with a little sobering about sort of, you know, expectations of when we can start thinking about a recovery relative to kind of what's going on with the pandemic in China. And if we if we Step back for a second. Maybe it's a little harder for us over here sometimes to monitor exactly the nuances of some of the vaccine developments. But one thing that's increasingly separating the U.S. recovery narrative from overseas is probably that to some degree. I'm wondering if we could get a little bit of a thought around maybe some of the vaccination programs and what the expectations are around that for within Macau, you know, broader thoughts on the local area there, possibly Hong Kong, and then how that could branch out to China in terms of is that what we may need to, you know, to really see a more, you know, concrete reopening for this entire market at this stage?

Is the sobering issue of China still awake?

Yes. I think, Sean, firstly, we have to stand back and look at the domestic Chinese economy during the course of especially the second half of 2020. So it is different from the Western economies. Largely, the domestic economy was recovering very strongly. So this is without, obviously, vaccination being applied to the whole population. And that's obviously attributable to the fantastic control of the pandemic. So as you look into the fourth quarter, you're getting the 6.5% GDP growth in domestic China. without the vaccination. So that's a very, very strong outcome. And obviously, the consumer is getting stronger across the board. So I think we have to look at China in a slightly different way. The strategy is to continue to control to basically zero local cases. And whether that is achieved through vaccination, whether that is achieved through what they've already been doing, clearly there is a path either way to clearing the locations and localities from the virus, and that will enable travel to resume more normally between mainland China and Macau. So I think that's the first and most important point. In terms of the vaccine strategy, locally you've seen – Comments from the local governments of both SARs, both Hong Kong and Macau, both have a strategy to procure a number of different vaccines, actually three from three different providers. And both cities are looking to procure the first batch during the first quarter, as we understand. So the local populations in the SARs will also be looking at a vaccination program in the months ahead. But really, the most important thing is still controlling the pandemic in terms of the local cases inside China itself. And if Macau then can be part of the domestic travel bubble in a bigger way, in an easier way, in a more fluent way than has been the case up to now, then obviously the tourism and the consumption spend will come back very strongly. And there has been progress. I think it's obviously it's from a low base, but there has been progress. There has been a gradual easing up of the logistics and the getting used to some of the guidelines throughout the course of the fourth quarter. But again, the central point is as the worldwide pandemic got worse in the winter months, there are more imported cases that leads to more isolated outbreaks in some of the provinces in China, then obviously that puts pressure on restrictions again and the travel advisories that are issued by various different local governments and entities, especially prior to Chinese New Year, which is, as you know, a period of huge migration of the population and travel. So that obviously rightly gives some consideration from the perspective of the authorities that we need to be very careful at this stage, which is very delicate. So again, another important point is as the pandemic, obviously, if it subsides in the rest of the world as well, then that imported risk reduces and that obviously relieves the pressure inside China as well, which hopefully is another factor that would lead to a normalization of the travel between Macau and mainland China.

That's helpful, Grant. And then maybe just as a further follow-up, this is probably maybe more for Wilfred if he's still on, but last quarter there was a little bit of commentary about the overseas gambling law, and I think we're approaching a little bit more or a closer kind of point of probably both where we know more things about that law and also its implementation, which I believe is set for March 1st. So just wondering, do we know anything more about that today than we knew before? Any changes or additions to that that we should be aware of?

Yes. Actually, the amendment to Article 303 of the criminal law has been enacted. It was enacted about two weeks ago. And as you appreciate, this law, this amendment, deals with people organizing gambling, running casinos, and particularly organizing citizens of China to go outside of the country to participate in gambling. Now, the enacted version made two changes of the previous draft. First, the definition of the criminal actor which they tried to come up with a definition, was removed. So they just used a catch-all phrase of whoever organizes. So this is to avoid people arguing who falls into the net. The second change appears to be a bit positive, but it's still ambiguous for Macau, is that in the legislation they specifically say outside of the country, which, as you all appreciate, Hong Kong, Macau and Taiwan is generally considered within the country. But then they leave an ambiguity there by putting the word offshore inside the bracket after outside the country. Now, this introduces the ambiguity, and I was discussing this with both our lawyers in Beijing and the local MPC, National People's Congress people attending the session. And they said that while the Central People's Government recognizes the special status of Macau, They do not want Macau to be exploited as a base for organizing such activities to take people outside of the country, such as the Southeast Asian countries. And as we all know, the Ministry of Tourism has compiled and is compiling a blacklist of countries to which they are known to be accommodating gambling from Chinese citizens. So to us there is certain ambiguity which will ultimately be decided by the authorities and the courts going forward. But at this stage, it is for sure that any person or junket trying to use Macau as a base to organize gambling to other countries would be condemned.

Thank you for that.

The last question. For the last question, we have David Katz from Jefferies. Your line is open.

Hi. My condolences as well. And the best part of this job is always the truly extraordinary people we get to meet. And he was certainly a treasure and fun. For sure.

That's so true. People, you know, the one thing I miss with Sheldon is his humor. Everyone talks about everything else, but he loved a laugh and had a good time. And even seeing him today, I miss that humor. What's your question, David? Thank you for your comments.

Look, I think one of the slides in your deck, it suggests or implies that some of the rolling volume that's gone away has been recaptured within mass as premium mass. Among all of the unknowables that you've done your best to address, are you able to look into what you have in the premium mass and measure how much of that is – you know, recapture of potential VIP dollars. And, you know, what is your best guess about, you know, if you were sitting down to model, you know, one to four years out, you know, how you would think about modeling VIP just given where we sit today? And that's it. Thank you.

Rand? Yep. Yes, thanks for the question, David. I think structurally, and this is not to do with the pandemic. Structurally, we've seen, obviously, the power and the growth of the premium mass over the last several years. And that trend is going to continue, whether it's pre-pandemic, during, and after. And the reality of that is because the players, the customers, they want to deal directly with the owners of operators of these great assets and obviously the great lifestyle destination that we provide, the multitude of amenities and the services that we're able to offer is very, very appealing. So I think that will continue. Your reference to, you know, is there a transfer from one segment to another? I think structurally there has been, you know, over the last several years anyway. And that's one of the brilliant things about Sheldon's integrated resort model is that we can offer everything from, you know, the entertainment, the retail, to the food and beverage, to the spas, all of these non-gaming lifestyle amenities. So that trend is structural, and that's why we strategically invested in products that serve this segment. In terms of specifically what's happening now, you know, the situation is, you know, you referenced, it's more related to issues specific to the system in the junket segment. And that has stabilized at low levels of volumes. And obviously, as a result of some of those issues, you may see that as new demand resurfaces and resumes in the coming years, that new demand is captured directly by the operators rather than through intermediaries. That also is true, but I think the overarching trend was there before anyway and would have continued in that manner. It's just that what's happened in the last 12 months may somewhat accelerate that trend, but it was going to be a big structural trend and driver for years to come anyway.

Perfect. Thank you very much. Thank you, David.

Ladies and gentlemen, that's all the time that we have for today. Thank you all for participating. You may now disconnect.