filings.toolsItem 1. FINANCIAL STATEMENTS
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Item 1. FINANCIAL STATEMENTS
LAS VEGAS SANDS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
| June 30, 2022 | December 31, 2021 | ||||||||||
| (In millions, except par value) (Unaudited) | |||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 6,452 | $ | 1,854 | |||||||
| Restricted cash and cash equivalents | 16 | 16 | |||||||||
| Accounts receivable, net of provision for credit losses of $211 and $232 | 158 | 202 | |||||||||
| Inventories | 24 | 22 | |||||||||
| Prepaid expenses and other | 120 | 113 | |||||||||
| Current assets of discontinued operations held for sale | — | 3,303 | |||||||||
| Total current assets | 6,770 | 5,510 | |||||||||
| Loan receivable | 1,200 | — | |||||||||
| Property and equipment, net | 11,498 | 11,850 | |||||||||
| Deferred income taxes, net | 189 | 297 | |||||||||
| Leasehold interests in land, net | 2,090 | 2,166 | |||||||||
| Intangible assets, net | 67 | 19 | |||||||||
| Other assets, net | 245 | 217 | |||||||||
| Total assets | $ | 22,059 | $ | 20,059 | |||||||
| LIABILITIES AND EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 76 | $ | 77 | |||||||
| Construction payables | 201 | 227 | |||||||||
| Other accrued liabilities | 1,234 | 1,334 | |||||||||
| Income taxes payable | 439 | 32 | |||||||||
| Current maturities of long-term debt | 73 | 74 | |||||||||
| Current liabilities of discontinued operations held for sale | — | 821 | |||||||||
| Total current liabilities | 2,023 | 2,565 | |||||||||
| Other long-term liabilities | 358 | 352 | |||||||||
| Deferred income taxes | 157 | 173 | |||||||||
| Long-term debt | 15,306 | 14,721 | |||||||||
| Total liabilities | 17,844 | 17,811 | |||||||||
| Commitments and contingencies (Note 9) | |||||||||||
| Equity: | |||||||||||
| Preferred stock, $0.001 par value, 50 shares authorized, zero shares issued and outstanding | — | — | |||||||||
| Common stock, $0.001 par value, 1,000 shares authorized, 833 shares issued, 764 shares outstanding | 1 | 1 | |||||||||
| Treasury stock, at cost, 69 shares | (4,481) | (4,481) | |||||||||
| Capital in excess of par value | 6,665 | 6,646 | |||||||||
| Accumulated other comprehensive loss | (86) | (22) | |||||||||
| Retained earnings (deficit) | 2,092 | (148) | |||||||||
| Total Las Vegas Sands Corp. stockholders’ equity | 4,191 | 1,996 | |||||||||
| Noncontrolling interests | 24 | 252 | |||||||||
| Total equity | 4,215 | 2,248 | |||||||||
| Total liabilities and equity | $ | 22,059 | $ | 20,059 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
LAS VEGAS SANDS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
| (In millions, except per share data) (Unaudited) | |||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| Casino | $ | 709 | $ | 843 | $ | 1,336 | $ | 1,708 | |||||||||||||||
| Rooms | 97 | 115 | 192 | 211 | |||||||||||||||||||
| Food and beverage | 63 | 50 | 116 | 106 | |||||||||||||||||||
| Mall | 148 | 148 | 297 | 304 | |||||||||||||||||||
| Convention, retail and other | 28 | 17 | 47 | 40 | |||||||||||||||||||
| Net revenues | 1,045 | 1,173 | 1,988 | 2,369 | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Casino | 445 | 574 | 913 | 1,152 | |||||||||||||||||||
| Rooms | 41 | 42 | 84 | 84 | |||||||||||||||||||
| Food and beverage | 73 | 60 | 138 | 131 | |||||||||||||||||||
| Mall | 19 | 16 | 37 | 31 | |||||||||||||||||||
| Convention, retail and other | 24 | 19 | 46 | 41 | |||||||||||||||||||
| Provision for credit losses | 2 | 2 | 6 | 6 | |||||||||||||||||||
| General and administrative | 238 | 219 | 456 | 444 | |||||||||||||||||||
| Corporate | 55 | 56 | 114 | 105 | |||||||||||||||||||
| Pre-opening | 3 | 4 | 7 | 9 | |||||||||||||||||||
| Development | 22 | 37 | 82 | 46 | |||||||||||||||||||
| Depreciation and amortization | 256 | 258 | 520 | 513 | |||||||||||||||||||
| Amortization of leasehold interests in land | 14 | 14 | 28 | 28 | |||||||||||||||||||
| Loss on disposal or impairment of assets | — | 11 | 6 | 14 | |||||||||||||||||||
| 1,192 | 1,312 | 2,437 | 2,604 | ||||||||||||||||||||
| Operating loss | (147) | (139) | (449) | (235) | |||||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||
| Interest income | 14 | 1 | 18 | 2 | |||||||||||||||||||
| Interest expense, net of amounts capitalized | (162) | (158) | (318) | (312) | |||||||||||||||||||
| Other income (expense) | (9) | 10 | (31) | (7) | |||||||||||||||||||
| Loss from continuing operations before income taxes | (304) | (286) | (780) | (552) | |||||||||||||||||||
| Income tax (expense) benefit | (110) | 6 | (112) | (8) | |||||||||||||||||||
| Net loss from continuing operations | (414) | (280) | (892) | (560) | |||||||||||||||||||
| Discontinued operations: | |||||||||||||||||||||||
| Income (loss) from operations of discontinued operations, net of tax | — | 38 | 46 | (24) | |||||||||||||||||||
| Gain on disposal of discontinued operations, net of tax | — | — | 2,861 | — | |||||||||||||||||||
| Adjustment to gain on disposal of discontinued operations, net of tax | (3) | — | (3) | — | |||||||||||||||||||
| Income (loss) from discontinued operations, net of tax | (3) | 38 | 2,904 | (24) | |||||||||||||||||||
| Net income (loss) | (417) | (242) | 2,012 | (584) | |||||||||||||||||||
| Net loss attributable to noncontrolling interests from continuing operations | 127 | 50 | 228 | 114 | |||||||||||||||||||
| Net income (loss) attributable to Las Vegas Sands Corp. | $ | (290) | $ | (192) | $ | 2,240 | $ | (470) | |||||||||||||||
| Earnings (loss) per share - basic and diluted: | |||||||||||||||||||||||
| Loss from continuing operations | $ | (0.38) | $ | (0.30) | $ | (0.87) | $ | (0.59) | |||||||||||||||
| Income (loss) from discontinued operations, net of income taxes | — | 0.05 | 3.80 | (0.03) | |||||||||||||||||||
| Net income (loss) attributable to Las Vegas Sands Corp. | $ | (0.38) | $ | (0.25) | $ | 2.93 | $ | (0.62) | |||||||||||||||
| Weighted average shares outstanding: | |||||||||||||||||||||||
| Basic and diluted | 764 | 764 | 764 | 764 | |||||||||||||||||||
The accompanying notes are an integral part of these condensed consolidated financial statements.
LAS VEGAS SANDS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
| (In millions) (Unaudited) | |||||||||||||||||||||||
| Net income (loss) | $ | (417) | $ | (242) | $ | 2,012 | $ | (584) | |||||||||||||||
| Currency translation adjustment | (61) | 6 | (65) | (36) | |||||||||||||||||||
| Cash flow hedge fair value adjustment | 6 | — | — | — | |||||||||||||||||||
| Total comprehensive income (loss) | (472) | (236) | 1,947 | (620) | |||||||||||||||||||
| Comprehensive loss attributable to noncontrolling interests | 125 | 49 | 229 | 115 | |||||||||||||||||||
| Comprehensive income (loss) attributable to Las Vegas Sands Corp. | $ | (347) | $ | (187) | $ | 2,176 | $ | (505) |
The accompanying notes are an integral part of these condensed consolidated financial statements.
LAS VEGAS SANDS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EQUITY
| Las Vegas Sands Corp. Stockholders’ Equity | |||||||||||||||||||||||||||||||||||||||||
| Common Stock | Treasury Stock | Capital in Excess of Par Value | Accumulated Other Comprehensive Income (Loss) | Retained Earnings (Deficit) | Noncontrolling Interests | Total | |||||||||||||||||||||||||||||||||||
| (In millions) (Unaudited) | |||||||||||||||||||||||||||||||||||||||||
| Balance at March 31, 2021 | $ | 1 | $ | (4,481) | $ | 6,629 | $ | (11) | $ | 535 | $ | 504 | $ | 3,177 | |||||||||||||||||||||||||||
| Net loss | — | — | — | — | (192) | (50) | (242) | ||||||||||||||||||||||||||||||||||
| Currency translation adjustment | — | — | — | 5 | — | 1 | 6 | ||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | 5 | — | — | — | 5 | ||||||||||||||||||||||||||||||||||
| Balance at June 30, 2021 | $ | 1 | $ | (4,481) | $ | 6,634 | $ | (6) | $ | 343 | $ | 455 | $ | 2,946 | |||||||||||||||||||||||||||
| Balance at January 1, 2021 | $ | 1 | $ | (4,481) | $ | 6,611 | $ | 29 | $ | 813 | $ | 565 | $ | 3,538 | |||||||||||||||||||||||||||
| Net loss | — | — | — | — | (470) | (114) | (584) | ||||||||||||||||||||||||||||||||||
| Currency translation adjustment | — | — | — | (35) | — | (1) | (36) | ||||||||||||||||||||||||||||||||||
| Exercise of stock options | — | — | 15 | — | — | 4 | 19 | ||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | 8 | — | — | 1 | 9 | ||||||||||||||||||||||||||||||||||
| Balance at June 30, 2021 | $ | 1 | $ | (4,481) | $ | 6,634 | $ | (6) | $ | 343 | $ | 455 | $ | 2,946 | |||||||||||||||||||||||||||
| Balance at March 31, 2022 | $ | 1 | $ | (4,481) | $ | 6,656 | $ | (29) | $ | 2,382 | $ | 148 | $ | 4,677 | |||||||||||||||||||||||||||
| Net loss | — | — | — | — | (290) | (127) | (417) | ||||||||||||||||||||||||||||||||||
| Currency translation adjustment | — | — | — | (61) | — | — | (61) | ||||||||||||||||||||||||||||||||||
| Cash flow hedge fair value adjustment | — | — | — | 4 | — | 2 | 6 | ||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | 10 | — | — | 1 | 11 | ||||||||||||||||||||||||||||||||||
| Tax withholding on vesting of equity awards | — | — | (1) | — | — | — | (1) | ||||||||||||||||||||||||||||||||||
| Balance at June 30, 2022 | $ | 1 | $ | (4,481) | $ | 6,665 | $ | (86) | $ | 2,092 | $ | 24 | $ | 4,215 | |||||||||||||||||||||||||||
| Balance at January 1, 2022 | $ | 1 | $ | (4,481) | $ | 6,646 | $ | (22) | $ | (148) | $ | 252 | $ | 2,248 | |||||||||||||||||||||||||||
| Net income (loss) | — | — | — | — | 2,240 | (228) | 2,012 | ||||||||||||||||||||||||||||||||||
| Currency translation adjustment | — | — | — | (64) | — | (1) | (65) | ||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | 20 | — | — | 1 | 21 | ||||||||||||||||||||||||||||||||||
| Tax withholding on vesting of equity awards | — | — | (1) | — | — | — | (1) | ||||||||||||||||||||||||||||||||||
| Balance at June 30, 2022 | $ | 1 | $ | (4,481) | $ | 6,665 | $ | (86) | $ | 2,092 | $ | 24 | $ | 4,215 |
The accompanying notes are an integral part of these condensed consolidated financial statements.
LAS VEGAS SANDS CORP. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
| Six Months Ended June 30, | |||||||||||
| 2022 | 2021 | ||||||||||
| (In millions) (Unaudited) | |||||||||||
| Cash flows from operating activities from continuing operations: | |||||||||||
| Net loss from continuing operations | $ | (892) | $ | (560) | |||||||
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||||||
| Depreciation and amortization | 520 | 513 | |||||||||
| Amortization of leasehold interests in land | 28 | 28 | |||||||||
| Amortization of deferred financing costs and original issue discount | 28 | 25 | |||||||||
| Change in fair value of derivative asset/liability | (1) | — | |||||||||
| Loss on disposal or impairment of assets | 5 | 6 | |||||||||
| Stock-based compensation expense | 20 | 9 | |||||||||
| Provision for credit losses | 6 | 6 | |||||||||
| Foreign exchange loss | 31 | 6 | |||||||||
| Deferred income taxes | (47) | (27) | |||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | 35 | 84 | |||||||||
| Other assets | 6 | 4 | |||||||||
| Accounts payable | (1) | (20) | |||||||||
| Other liabilities | (428) | (179) | |||||||||
| Net cash used in operating activities from continuing operations | (690) | (105) | |||||||||
| Cash flows from investing activities from continuing operations: | |||||||||||
| Capital expenditures | (335) | (448) | |||||||||
| Proceeds from disposal of property and equipment | 6 | 6 | |||||||||
| Acquisition of intangible assets and other | (103) | — | |||||||||
| Net cash used in investing activities from continuing operations | (432) | (442) | |||||||||
| Cash flows from financing activities from continuing operations: | |||||||||||
| Proceeds from exercise of stock options | — | 19 | |||||||||
| Tax withholding on vesting of equity awards | (1) | — | |||||||||
| Proceeds from long-term debt (Note 4) | 700 | 505 | |||||||||
| Repayments of long-term debt (Note 4) | (35) | (34) | |||||||||
| Payments of financing costs | (9) | (8) | |||||||||
| Transactions with discontinued operations | 5,032 | 50 | |||||||||
| Net cash generated from financing activities from continuing operations | 5,687 | 532 | |||||||||
| Cash flows from discontinued operations: | |||||||||||
| Net cash generated from operating activities | 149 | 78 | |||||||||
| Net cash generated from (used in) investing activities | 4,883 | (28) | |||||||||
| Net cash provided (to) by continuing operations and (used in) financing activities | (5,032) | (51) | |||||||||
| Net cash used in discontinued operations | — | (1) | |||||||||
| Effect of exchange rate on cash, cash equivalents and restricted cash | (22) | (10) | |||||||||
| Increase (decrease) in cash, cash equivalents and restricted cash | 4,543 | (26) | |||||||||
| Cash, cash equivalents and restricted cash at beginning of period | 1,925 | 2,137 | |||||||||
| Cash, cash equivalents and restricted cash at end of period | 6,468 | 2,111 | |||||||||
| Less: cash, cash equivalents and restricted cash at end of period for discontinued operations | — | (38) | |||||||||
| Cash, cash equivalents and restricted cash at end of period for continuing operations | $ | 6,468 | $ | 2,073 | |||||||
| Supplemental disclosure of cash flow information | |||||||||||
| Cash payments for interest, net of amounts capitalized | $ | 278 | $ | 290 | |||||||
| Cash payments for taxes, net of refunds | $ | 344 | $ | 81 | |||||||
| Change in construction payables | $ | (26) | $ | (135) |
The accompanying notes are an integral part of these condensed consolidated financial statements.
LAS VEGAS SANDS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
Note 1 — Organization and Business of Company
The accompanying condensed consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Annual Report on Form 10-K of Las Vegas Sands Corp. (“LVSC”), a Nevada corporation, and its subsidiaries (collectively the “Company”) for the year ended December 31, 2021, and have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission. Certain information and footnote disclosures normally included in the financial statements prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) have been condensed or omitted pursuant to such rules and regulations; however, the Company believes the disclosures herein are adequate to make the information presented not misleading. In the opinion of management, all adjustments and normal recurring accruals considered necessary for a fair statement of the results for the interim period have been included. The interim results reflected in the unaudited condensed consolidated financial statements are not necessarily indicative of expected results for the full year.
COVID-19 Pandemic Update
In early January 2020, an outbreak of a respiratory illness caused by a novel coronavirus (“COVID-19”) was identified and the disease spread rapidly across the world causing the World Health Organization to declare the outbreak of a pandemic on March 12, 2020 (the “COVID-19 Pandemic”). Governments around the world mandated actions to contain the spread of the virus that included stay-at-home orders, quarantines, capacity limits, closures of non-essential businesses, including entertainment activities, and significant restrictions on travel. The government actions varied based upon a number of factors, including the extent and severity of the COVID-19 Pandemic within their respective countries and jurisdictions.
Macao
Visitation to the Macao Special Administrative Region (“Macao”) of the People’s Republic of China (“China”) has remained substantially below pre-COVID-19 levels as a result of various government policies limiting or discouraging travel. Other than people from mainland China who in general may enter Macao without quarantine subject to them holding the appropriate travel documents, a negative COVID-19 test result issued within a specified time period and a green health-code, there remains in place a complete ban on entry or a need to undergo various quarantine requirements depending on the person’s residency and recent travel history. The Company’s operations in Macao will continue to be impacted and subject to changes in the government policies of Macao, China, Hong Kong and other jurisdictions in Asia addressing travel and public health measures associated with COVID-19.
Following an outbreak in Macao in mid-June, the Macao government announced a series of preventative measures. These included closure of a range of government, public and social facilities, with restaurants only permitted to offer take away services. Residential and commercial buildings with confirmed COVID-19 cases have been required to implement various levels of access control. In addition to the health safeguards already in place, the government has implemented a series of mass nucleic acid and rapid antigen tests for the general population. Management is currently unable to determine when these measures will be eased or cease to be necessary.
The Company’s Macao gaming operations remained open during the six months ended June 30, 2022. Guest visitation to the properties, however, was adversely affected during the six months ended June 30, 2022 due to the various outbreaks that occurred in Shanghai, Hong Kong, Guangdong and Macao, which resulted in tighter travel restrictions.
On July 9, 2022, the Macao government issued executive order 115/2022 ordering casinos and all non-essential businesses to close from July 11 to July 18 in an attempt to control a recent outbreak of COVID-19 in Macao. On July 16, 2022, the Macao government announced an extension of this executive order through July 22. On July 20, 2022, the Macao government announced a consolidation period, which would start on July 23, 2022 and end on July 30, 2022 whereby certain business activities will be allowed to resume limited operations, clarifying that casino operations could resume but with a maximum capacity of 50% of casino staff working at any point in time. The timing and manner in which our casinos, restaurants and shopping malls will reopen and/or operate at full capacity are currently unknown.
LAS VEGAS SANDS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
As with prior periods, in support of the Macao government’s initiatives to fight the COVID-19 Pandemic, throughout the six months ended June 30, 2022 and in June in particular the Company has provided both towers of the Sheraton Grand Macao hotel and also The Parisian Macao hotel to the Macao government to house individuals for quarantine and medical observation purposes.
The Company’s ferry operations between Macao and Hong Kong remain suspended. The timing and manner in which the Company’s ferry operations will be able to resume are currently unknown.
The Company’s operations in Macao have been significantly impacted by the reduced visitation to Macao. The Macao government announced total visitation from mainland China to Macao decreased approximately 12.2% and 78.1%, during the six months ended June 30, 2022, as compared to the same period in 2021 and 2019 (pre-pandemic), respectively. The Macao government also announced gross gaming revenue decreased approximately 46.4% and 82.4%, during the six months ended June 30, 2022, as compared to the same period in 2021 and 2019, respectively.
Singapore
In Singapore, Vaccinated Travel Lanes (“VTLs”) were introduced for a number of key source markets in November and December of 2021 for vaccinated visitors with a negative COVID-19 test. Due to the emergence of the Omicron variant, however, new ticket sales for the VTLs were suspended on December 23, 2021 through January 20, 2022. The VTL program was terminated on March 31, 2022, and the Vaccinated Travel Framework (“VTF”) was launched on April 1, 2022, to facilitate the resumption of travel for all travelers, including short-term visitors. Under the VTF, all fully vaccinated travelers and non-fully vaccinated children aged 12 and below are permitted to enter Singapore, without entry approvals or taking VTL transport and starting April 26, 2022, these travelers are no longer required to take a COVID-19 test before departing for Singapore. Operations at Marina Bay Sands will continue to be impacted and subject to changes in the government policies of Singapore and other jurisdictions in Asia addressing travel and public health measures associated with COVID-19.
Visitation to Marina Bay Sands continues to be impacted by the effects of the COVID-19 Pandemic; however, visitation has since increased since restrictions have been lifted. The Singapore Tourism Board (“STB”) announced total visitation to Singapore increased from approximately 119,000 in 2021 to 1.5 million in 2022 on a year-to-date basis, while visitation decreased 83.9% when compared to the same period in 2019.
Summary
The disruptions arising from the COVID-19 Pandemic continued to have a significant adverse impact on the Company’s financial condition and operations during the six months ended June 30, 2022. The duration and intensity of this global health situation and related disruptions are uncertain. Given the dynamic nature of these circumstances, the impact on the Company’s consolidated results of operations, cash flows and financial condition in 2022 will be material, but cannot be reasonably estimated at this time as it is unknown when the impact of the COVID-19 Pandemic will end, when or how quickly the current travel and operational restrictions will be modified or cease to be necessary and the resulting impact on the Company’s business and the willingness of tourism patrons to spend on travel and entertainment and business patrons to spend on MICE.
While each of the Company’s properties were open with some operating at reduced levels due to lower visitation and required safety measures in place during the six months ended June 30, 2022, the current economic and regulatory environment on a global basis and in each of the Company’s jurisdictions continue to evolve. The Company cannot predict the manner in which governments will react as the global and regional impact of the COVID-19 Pandemic changes over time, which could significantly alter the Company’s current operations.
The Company has a strong balance sheet and sufficient liquidity in place, including total cash and cash equivalents balance, excluding restricted cash and cash equivalents, of $6.45 billion and access to $1.50 billion, $1.04 billion and $423 million of available borrowing capacity from the LVSC Revolving Facility, 2018 SCL Revolving Facility and the 2012 Singapore Revolving Facility, respectively, as of June 30, 2022. The Company believes it is able to support continuing operations, complete the major construction projects that are underway, proceed with the Macao concession renewal process and respond to the current COVID-19 Pandemic challenges.
LAS VEGAS SANDS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
The Company has taken various mitigating measures to manage through the current environment, including a cost and capital expenditure reduction program to minimize cash outflow for non-essential items.
Macao Subconcession
Gaming in Macao is administered by the government through concession agreements awarded to three different concessionaires and three subconcessionaires, of which Venetian Macau Limited (“VML,” a subsidiary of Sands China Ltd.) is one. On June 23, 2022, an extension was approved and authorized by the Macao government and executed between VML and Galaxy Casino, S.A., pursuant to which the subconcession has been extended from June 26, 2022 to December 31, 2022. VML paid the Macao government 47 million patacas (approximately $6 million at exchange rates in effect on June 30, 2022) and will provide a bank guarantee by September 23, 2022 of 2.31 billion patacas (approximately $286 million at exchange rates in effect on June 30, 2022) to secure the fulfillment of VML's payment obligations towards its employees should VML be unsuccessful in tendering for a new concession contract after its subconcession expires.
In order to enable VML to fulfill the relevant requirements to become eligible to obtain the subconcession extension as mentioned above, each of VML, Venetian Cotai Limited (“VCL”) and Venetian Orient Limited (“VOL”) entered into a letter of undertaking (“Undertakings”), pursuant to which each of VML, VCL and VOL has undertaken, pursuant to article 40 of the Gaming Law and article 43 of VML’s subconcession agreement, to revert to the Macao government relevant gaming equipment and gaming areas (as identified in the Undertakings) without compensation and free of any liens or charges upon the expiry of the term of the subconcession extension period. The total casino areas and supporting areas subject to reversion is approximately 136,000 square meters, representing approximately 4.7% of the total property area of these entities.
On June 21, 2022, the Macao Legislative Assembly passed a draft bill entitled Amendment to Law No. 16/2001 to amend Macao’s gaming law, which was published in the Macao Official Gazette on June 22, 2022 as Law No. 7/2022, and became effective on June 23, 2022 (the "Gaming Law"). Certain changes to the Gaming Law include a reduction in the term of future gaming concessions to ten (10) years; authorization of up to six (6) gaming concession contracts; an increase in the minimum capital contribution of concessionaires to 5 billion patacas (approximately $619 million at exchange rates in effect on June 30, 2022); an increase in the percentage of the share capital of the concessionaire that must be held by the local managing director to 15%; a requirement that casinos be located in real estate owned by the concessionaire; and a prohibition of revenue sharing arrangements between gaming promoters and concessionaires.
On July 5, 2022, the Macao government published Administrative Regulation No. 28/2022 – Amendment of Administrative Regulation No. 26/2001, which sets forth the regulations governing the upcoming tender for gaming concessions in Macao. The regulation includes details on the process of bidding for the gaming concessions, qualifications of the companies bidding and the criteria for granting them. The Company continues to believe it will be successful in extending the term of its subconcession and/or obtaining a new gaming concession when its current subconcession expires; however, it is possible the Macao government could further change or interpret the associated gaming laws in a manner that could negatively impact the Company.
Under the Company's Sands China Ltd. (“SCL”) senior notes indentures, upon the occurrence of any event resulting from any change in the Gaming Law (as defined in the indentures) or any action by the gaming authority after which none of SCL or any of its subsidiaries own or manage casino or gaming areas or operate casino games of fortune and chance in Macao in substantially the same manner as they were owning or managing casino or gaming areas or operating casino games as at the issue date of the SCL senior notes, for a period of 30 consecutive days or more, and such event has a material adverse effect on the financial condition, business, properties or results of operations of SCL and its subsidiaries, taken as a whole, each holder of the SCL senior notes would have the right to require the Company to repurchase all or any part of such holder's SCL senior notes at par, plus any accrued and unpaid interest (the "Investor Put Option").
Additionally, under the 2018 SCL Credit Facility, the events that trigger an Investor Put Option under the SCL senior notes (as described above) would be an event of default, which may result in commitments being immediately
LAS VEGAS SANDS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
cancelled, in whole or in part, and the related outstanding balances and accrued interest, if any, becoming immediately due and payable.
The subconcession not being further extended or renewed and the potential impact if holders of the notes and the agent have the ability to, and make the election to, accelerate the repayment of the Company's debt would have a material adverse effect on the Company's business, financial condition, results of operations and cash flows. The Company intends to follow the process for a concession renewal as indicated above.
Marina Bay Sands Gaming License
In April 2022, the Company paid 72 million Singapore dollars ("SGD," approximately $53 million at exchange rates in effect at the time of the transaction) to the Singapore Casino Regulatory Authority as part of the process to renew its gaming license at Marina Bay Sands, which will now expire in April 2025.
Subsequent Event
On July 11, 2022, the Company entered into an intercompany term loan agreement with SCL, a related party, in the amount of $1.0 billion, which is repayable on July 11, 2028. In the first two years from July 11, 2022, SCL will have the option to elect to pay cash interest at 5% per annum or payment-in-kind interest at 6% per annum by adding the amount of such interest to the then-outstanding principal amount of the loan, following which only cash interest at 5% per annum will be payable. This loan is unsecured, subordinated to all third party unsecured indebtedness and other obligations of SCL and its subsidiaries and is eliminated in consolidation.
Recent Accounting Pronouncements
The Company’s management has evaluated all of the recently issued, but not yet effective, accounting standards that have been issued or proposed by the Financial Accounting Standards Board (“FASB”) or other standards-setting bodies through the filing date of these financial statements and does not believe the future adoption of any such pronouncements will have a material effect on the Company’s financial position, results of operations and cash flows.
LAS VEGAS SANDS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
Note 2 — Discontinued Operations
On February 23, 2022, the Company completed the previously announced sale of its Las Vegas real property and operations (the “Closing”), including The Venetian Resort Las Vegas and the Sands Expo and Convention Center (collectively referred to as the “Las Vegas Operations”), to VICI Properties L.P. (“PropCo”) and Pioneer OpCo, LLC (“OpCo”) for an aggregate purchase price of approximately $6.25 billion (the “Las Vegas Sale”). Under the terms of the agreements related to the Las Vegas Sale, OpCo acquired subsidiaries that hold the operating assets and liabilities of the Las Vegas Operations for approximately $1.05 billion in cash, subject to certain post-closing adjustments, and $1.20 billion in seller financing in the form of a six-year term loan credit and security agreement (the “Seller Financing Loan Agreement”) and PropCo acquired subsidiaries that hold the real estate and real estate-related assets of the Las Vegas Operations for approximately $4.0 billion in cash.
Upon closing, the Company received approximately $5.05 billion in cash proceeds, before transaction costs and working capital adjustments of $77 million, and recognized a gain on disposal of $3.61 billion, before income tax expense of $750 million, during the six months ended June 30, 2022.
As there is no continuing involvement between the Company and the Las Vegas Operations, the Company accounted for the transaction as a sale of a business. The Company concluded the Las Vegas Operations met the criteria for held for sale and discontinued operations beginning in the first quarter of 2021. As a result, the Las Vegas Operations is presented in the accompanying condensed consolidated statements of operations and cash flows as a discontinued operation for all periods presented. The Company reported the operating results and cash flows related to the Las Vegas Operations through February 22, 2022. Current and non-current assets and liabilities of the Las Vegas Operations as of December 31, 2021, are presented in the accompanying condensed consolidated balance sheets as current assets and liabilities held for sale.
Unless otherwise noted, amounts and disclosures throughout these Notes to Consolidated Financial Statements relate to the Company's continuing operations.
Contingent Lease Support Agreement
On February 23, 2022, in connection with the Closing, the Company and OpCo entered into a post-closing contingent lease support agreement (the “Contingent Lease Support Agreement”) pursuant to which, among other things, the Company may be required to make certain payments (“Support Payments”) to OpCo.
The Support Payments are payable on a monthly basis following the Closing through the year ending December 31, 2023, based upon the performance of the Las Vegas Operations relative to certain agreed upon target metrics and subject to quarterly and annual adjustments. The target metrics are measured against a benchmark annual EBITDAR (as defined in the Contingent Lease Support Agreement) of the Las Vegas Operations equal to $250 million for the period beginning July 1, 2022 and ending December 31, 2022, and $500 million for the period beginning January 1, 2023 and ending December 31, 2023. The Company’s payment obligations are subject to an annual cap equal to $125 million for the annual period beginning July 1, 2022 and ending December 31, 2022, and $250 million for the annual period beginning January 1, 2023 and ending December 31, 2023. Each monthly Support Payment is subject to a prorated cap based on the annual cap. No Support Payments were made for the period post-Closing through June 30, 2022.
Seller Financing Loan Agreement
At the Closing, the Company, as lender, OpCo, as borrower, the parent company of OpCo (“Holdings”) and certain subsidiaries of OpCo, as guarantors party thereto (collectively, and with Holdings, the “Guarantors” and, together with OpCo in its capacity as borrower, the “Loan Parties”), entered into the Seller Financing Loan Agreement. Refer to “Note 3 — Loan Receivable” for further information.
LAS VEGAS SANDS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
The following table represents summarized balance sheet information of assets and liabilities of the discontinued operation:
| December 31, 2021 | |||||||||||
| (In millions) | |||||||||||
| Cash and cash equivalents | $ | 55 | |||||||||
| Accounts receivable, net of provision for credit losses of $58 | 126 | ||||||||||
| Inventories | 9 | ||||||||||
| Prepaid expenses and other | 23 | ||||||||||
| Property and equipment, net | 2,864 | ||||||||||
| Other assets, net | 226 | ||||||||||
| Total held for sale assets in the balance sheet | $ | 3,303 | |||||||||
| Accounts payable | $ | 24 | |||||||||
| Construction payables | 8 | ||||||||||
| Other accrued liabilities | 318 | ||||||||||
| Long-term debt | 2 | ||||||||||
| Deferred amounts related to mall sale transactions | 338 | ||||||||||
| Other long-term liabilities | 131 | ||||||||||
| Total held for sale liabilities in the balance sheet | $ | 821 |
LAS VEGAS SANDS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
The following table represents summarized income statement information of discontinued operations:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2022 | 2021 | 2022**(1)** | 2021 | ||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| Casino | $ | — | $ | 110 | $ | 61 | $ | 163 | |||||||||||||||
| Rooms | — | 107 | 78 | 152 | |||||||||||||||||||
| Food and beverage | — | 52 | 43 | 76 | |||||||||||||||||||
| Convention, retail and other | — | 21 | 46 | 38 | |||||||||||||||||||
| Net revenues | — | 290 | 228 | 429 | |||||||||||||||||||
| Resort operations expenses | — | 151 | 107 | 262 | |||||||||||||||||||
| Provision for credit losses | — | 3 | 3 | 3 | |||||||||||||||||||
| General and administrative | — | 85 | 55 | 160 | |||||||||||||||||||
| Depreciation and amortization | — | — | — | 25 | |||||||||||||||||||
| Loss on disposal or impairment of assets | — | 1 | — | 3 | |||||||||||||||||||
| Operating income (loss) | — | 50 | 63 | (24) | |||||||||||||||||||
| Interest expense | — | (4) | (2) | (7) | |||||||||||||||||||
| Other income (expense) | — | 2 | (3) | 1 | |||||||||||||||||||
| Income (loss) from operations of discontinued operations | — | 48 | 58 | (30) | |||||||||||||||||||
| Gain on disposal of discontinued operations | — | — | 3,611 | — | |||||||||||||||||||
| Adjustment to gain on disposal of discontinued operations(2) | (3) | — | (3) | — | |||||||||||||||||||
| Income (loss) from discontinued operations, before income tax | (3) | 48 | 3,666 | (30) | |||||||||||||||||||
| Income tax (expense) benefit | — | (10) | (762) | 6 | |||||||||||||||||||
| Net income (loss) from discontinued operations presented in the statement of operations | $ | (3) | $ | 38 | $ | 2,904 | $ | (24) | |||||||||||||||
| Adjusted Property EBITDA | $ | — | $ | 51 | $ | 63 | $ | 4 |
(1) Includes the Las Vegas Operations financial results for the period from January 1, 2022 through February 22, 2022.
(2) Relates to the finalization of the working capital adjustment pursuant to the terms of the related agreements.
For the 53-day period ended February 22, 2022 and for the six months ended June 30, 2021, the Company’s Las Vegas Operations were classified as a discontinued operation held for sale. The Company applied the intraperiod tax allocation rules to allocate the provision for income taxes between continuing operations and discontinued operations using the “with and without” approach. The Company calculated income tax expense from all financial statement components (continuing and discontinued operations), the “with” computation, and compared that to the income tax expense attributable to continuing operations, the “without” computation. The difference between the “with” and “without” computations was allocated to discontinued operations.
LAS VEGAS SANDS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
The Company’s effective income tax rate from discontinued operations was 20.8% and (20.0)% for the six months ended June 30, 2022 and 2021, respectively, which reflects the application of the “with and without” approach consistent with intraperiod tax allocation rules. The income tax on discontinued operations reflects a 21% corporate income tax rate on the Company’s Las Vegas Operations. The cash income tax expense as if the discontinued operations was a standalone enterprise and a separate taxpayer is $803 million. The Company files a U.S. consolidated income tax return inclusive of the discontinued operations which allows the income from discontinued operations to utilize net operating loss carryforwards and operating losses from continuing operations, U.S. foreign tax credits and charitable contribution carryforwards. As of June 30, 2022, the Company recorded a U.S. cash tax payable of $282 million inclusive of the gain on sale of the Las Vegas Operations, after the payment of two installments in April and June, 2022 totaling $324 million, with the remaining installments to be paid on September 15 and December 15, 2022.
Note 3 — Loan Receivable
Seller Financing Loan Agreement
At the Closing, the Company and the Loan Parties entered into the Seller Financing Loan Agreement. The Seller Financing Loan Agreement provides for a six-year senior secured term loan facility in an aggregate principal amount of $1.20 billion (the “Seller Loan”) at the date of the Closing. The Seller Loan is guaranteed by the Guarantors and secured by a first-priority lien on substantially all of the Loan Parties’ assets (subject to customary exceptions and limitations), including a leasehold mortgage from OpCo over certain real estate that was sold to PropCo at the Closing and leased by OpCo.
The Seller Loan will bear interest at a rate equal to 1.50% per annum for the calendar years ending December 31, 2022 and 2023, and 4.25% per annum for each calendar year thereafter, subject to an increase of 1.00% per annum for any interest OpCo elects to pay by increasing the principal amount of the Seller Loan prior to January 1, 2024, and an increase of 1.50% per annum for any such election during the calendar year ending December 31, 2024. Any interest to be paid after December 31, 2024, will be paid in cash.
The Seller Financing Loan Agreement contains certain customary representations and warranties and covenants, subject to customary exceptions and thresholds. The Seller Financing Loan Agreement’s negative covenants restrict the ability of the Loan Parties and their subsidiaries to, among other things, (i) incur debt, (ii) create certain liens on their assets, (iii) dispose of their assets, (iv) make investments or restricted payments, including dividends, (v) merge, liquidate, dissolve, change their business or consolidate with other entities and (vi) enter into affiliate transactions.
The Seller Financing Loan Agreement also contains customary events of default, including payment defaults, cross defaults to material debt, bankruptcy and insolvency, breaches of covenants and inaccuracy of representations and warranties, subject to customary grace periods. Upon an event of default, the Company may declare any then-outstanding amounts due and payable and exercise other customary remedies available to a secured lender.
Loan receivables are carried at the outstanding principal amount. A provision for credit loss on loan receivables is established when, based on current information and events, it is probable that the Company will be unable to collect all amounts due according to the contractual terms of the loan agreement. The Company determines this by considering several factors, including the credit risk and current financial condition of the borrower, the borrower’s ability to pay current obligations, historical trends, and economic and market conditions. The Company performs a credit quality assessment on the loan receivable on a quarterly basis and reviews the need for an allowance under Accounting Standards Update No. 2016-13. The Company evaluates the extent and impact of any credit deterioration that could affect the performance and the value of the secured property, as well as the financial and operating capability of the borrower. The Company also evaluates and considers the overall economic environment, casino and hospitality industry and geographic sub-market in which the secured property is located. Based on the Company’s assessment of the credit quality of the loan receivable, the Company believes it will collect all contractual amounts due under the loan. Accordingly, no provision for credit losses on the loan receivable was established as of June 30, 2022.
LAS VEGAS SANDS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
Interest income is recorded on an accrual basis at the stated interest rate and is recorded in interest income in the accompanying condensed consolidated statements of operations.
The carrying value of the loan receivable is $1.20 billion as of June 30, 2022, compared to its estimated fair value of $1.10 billion. The fair value is estimated based on level 2 inputs and reflects the increase in market interest rates since finalizing the terms of the loan receivable at a fixed interest rate on March 2, 2021. Interest income recognized on the loan was $4 million and $6 million during the three and six months ended June 30, 2022, respectively.
LAS VEGAS SANDS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
Note 4 — Long-Term Debt
Long-term debt consists of the following:
| June 30, 2022 | December 31, 2021 | ||||||||||
| (In millions) | |||||||||||
| Corporate and U.S. Related**(1)****:** | |||||||||||
| 3.200% Senior Notes due 2024 (net of unamortized original issue discount and deferred financing costs of $7 and $8, respectively) | $ | 1,743 | $ | 1,742 | |||||||
| 2.900% Senior Notes due 2025 (net of unamortized original issue discount and deferred financing costs of $3) | 497 | 497 | |||||||||
| 3.500% Senior Notes due 2026 (net of unamortized original issue discount and deferred financing costs of $7 and $8, respectively) | 993 | 992 | |||||||||
| 3.900% Senior Notes due 2029 (net of unamortized original issue discount and deferred financing costs of $7) | 743 | 743 | |||||||||
| Macao Related**(1)****:** | |||||||||||
| 5.125% Senior Notes due 2025 (net of unamortized original issue discount and deferred financing costs of $8 and $9, respectively) | 1,792 | 1,791 | |||||||||
| 3.800% Senior Notes due 2026 (net of unamortized original issue discount and deferred financing costs of $5 and $6, respectively) | 795 | 794 | |||||||||
| 2.300% Senior Notes due 2027 (net of unamortized original issue discount and deferred financing costs of $7) | 693 | 693 | |||||||||
| 5.400% Senior Notes due 2028 (net of unamortized original issue discount and deferred financing costs of $14 and $15, respectively) | 1,886 | 1,885 | |||||||||
| 2.850% Senior Notes due 2029 (net of unamortized original issue discount and deferred financing costs of $7) | 643 | 643 | |||||||||
| 4.375% Senior Notes due 2030 (net of unamortized original issue discount and deferred financing costs of $8 and $9, respectively) | 692 | 691 | |||||||||
| 3.250% Senior Notes due 2031 (net of unamortized original issue discount and deferred financing costs of $6) | 594 | 594 | |||||||||
| 2018 SCL Credit Facility — Revolving | 1,447 | 753 | |||||||||
| Other(2) | 23 | 27 | |||||||||
| Singapore Related**(1)****:** | |||||||||||
| 2012 Singapore Credit Facility — Term (net of unamortized deferred financing costs of $37 and $43, respectively) | 2,791 | 2,902 | |||||||||
| 2012 Singapore Credit Facility — Delayed Draw Term (net of unamortized deferred financing costs of $1) | 44 | 45 | |||||||||
| Other(2) | 3 | 3 | |||||||||
| 15,379 | 14,795 | ||||||||||
| Less — current maturities | (73) | (74) | |||||||||
| Total long-term debt | $ | 15,306 | $ | 14,721 |
(1)Unamortized deferred financing costs of $73 million and $81 million as of June 30, 2022 and December 31, 2021, respectively, related to the Company’s revolving credit facilities and the undrawn portion of the Singapore Delayed Draw Term Facility are included in other assets, net, in the accompanying condensed consolidated balance sheets.
(2)Includes finance leases related to Macao and Singapore of $21 million and $1 million as of June 30, 2022, respectively, and $24 million and $1 million as of December 31, 2021, respectively.
LAS VEGAS SANDS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
LVSC Revolving Facility
As of June 30, 2022, the Company had $1.50 billion of available borrowing capacity under the LVSC Revolving Facility, net of outstanding letters of credit.
SCL Senior Notes
On February 16 and June 16, 2022, Standard & Poor’s (“S&P”) and Fitch, respectively, downgraded the credit rating for the Company and SCL to BB+. As a result of the downgrades, the coupon on each series of the outstanding SCL Senior Notes will increase by 0.50% per annum, with a 0.25% per annum increase becoming effective on the first interest payment date after February 16, 2022 as it relates to S&P and an additional 0.25% increase per annum after June 16, 2022 as it relates to Fitch. This will result in an increase of $16 million in interest expense for the year ended December 31, 2022 and $36 million for each year thereafter through 2024, at which time this will decrease as the SCL Senior Notes are repaid based on each of their set maturity dates.
2018 SCL Credit Facility
During the six months ended June 30, 2022, SCL drew down $67 million and 4.96 billion Hong Kong dollars (“HKD,” approximately $632 million at exchange rates in effect on June 30, 2022) under the facility for general corporate purposes.
As of June 30, 2022, SCL had $1.04 billion of available borrowing capacity under the 2018 SCL Revolving Facility comprised of HKD commitments of HKD 7.36 billion (approximately $938 million at exchange rates in effect on June 30, 2022) and U.S. dollar commitments of $99 million.
2012 Singapore Credit Facility
As of June 30, 2022, Marina Bay Sands Pte. Ltd. (“MBS”) had SGD 590 million (approximately $423 million at exchange rates in effect on June 30, 2022) of available borrowing capacity under the 2012 Singapore Revolving Facility, net of outstanding letters of credit, primarily consisting of a banker’s guarantee for SGD 153 million (approximately $110 million at exchange rates in effect on June 30, 2022) pursuant to a development agreement.
On February 9, 2022, MBS entered into the Fourth Amendment and Restatement Agreement (the “Fourth Amendment Agreement”) with DBS Bank Ltd., as agent and security trustee. The Fourth Amendment Agreement amended and restated the facility agreement, dated as of June 25, 2012 (as amended, the “Existing Facility Agreement”). Pursuant to the Fourth Amendment Agreement, the Existing Facility Agreement was amended to update the terms therein that provide for a transition away from the Swap Offer Rate (“SOR”) as a benchmark interest rate and the replacement of SOR by a replacement benchmark interest rate or mechanism.
Under the Fourth Amendment Agreement, outstanding loans bear interest at the Singapore Overnight Rate Average (“SORA”) with a credit spread adjustment of 0.19% per annum, plus an applicable margin ranging from 1.15% to 1.85% per annum, based on MBS’s consolidated leverage ratio (estimated interest rate set at approximately 2.85% as of June 30, 2022).
During 2021, the Company amended its 2012 Singapore Credit Facility, which, among other things, extended to March 31, 2022, the deadline for delivering the construction cost estimate and the construction schedule for the MBS Expansion Project. The Company is in the process of reviewing the budget and timing of the MBS expansion based on the impact of the COVID-19 Pandemic and other factors. As a result, the construction cost estimate and construction schedule were not delivered to the lenders by the March 31, 2022 deadline. As of June 30, 2022, there is SGD 3.69 billion (approximately $2.65 billion at exchange rates in effect on June 30, 2022) left of total borrowing capacity, which is only available to be drawn under the Singapore Delayed Draw Term Facility after the construction cost estimate and construction schedule for the MBS Expansion Project are delivered to lenders. The Company does not anticipate material spend related to the MBS Expansion Project prior to the delivery of these items to the lenders.
LAS VEGAS SANDS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
Debt Covenant Compliance
As of June 30, 2022, management believes the Company was in compliance with all debt covenants. The Company amended its credit facilities to, among other things, waive the Company’s requirement to comply with certain financial covenant ratios through December 31, 2022 for LVSC and MBS and January 1, 2023 for SCL, which include a maximum leverage ratio or net debt to trailing twelve-months adjusted earnings before interest, income taxes, depreciation and amortization, calculated in accordance with the respective credit agreement, of 4.0x, 4.0x and 4.5x under the LVSC Revolving Facility, 2018 SCL Credit Facility and 2012 Singapore Credit Facility, respectively. The Company’s compliance with its financial covenants for periods beyond December 31, 2022 for MBS and LVSC and January 1, 2023 for SCL, could be affected by certain factors beyond the Company’s control, such as the impact of the COVID-19 Pandemic, including current travel and border restrictions continuing in the future. The Company will pursue additional waivers to meet the required financial covenant ratios for periods beyond the current covenant waiver periods, if deemed necessary.
Cash Flows from Financing Activities
Cash flows from financing activities related to long-term debt and finance lease obligations are as follows:
| Six Months Ended June 30, | |||||||||||
| 2022 | 2021 | ||||||||||
| (In millions) | |||||||||||
| Proceeds from 2018 SCL Credit Facility | $ | 700 | $ | 505 | |||||||
| $ | 700 | $ | 505 | ||||||||
| Repayments on 2012 Singapore Credit Facility | $ | (30) | $ | (31) | |||||||
| Repayments on Other Long-Term Debt | (5) | (3) | |||||||||
| $ | (35) | $ | (34) |
Fair Value of Long-Term Debt
The estimated fair value of the Company’s long-term debt as of June 30, 2022 and December 31, 2021, was approximately $13.31 billion and $15.06 billion, respectively, compared to its contractual value of $15.47 billion and $14.90 billion, respectively. The estimated fair value of the Company’s long-term debt is based on recent trades, if available, and indicative pricing from market information (level 2 inputs).
Note 5 — Accounts Receivable, Net and Customer Contract Related Liabilities
Accounts Receivable and Provision for Credit Losses
Accounts receivable is comprised of casino, hotel, mall and other receivables, which do not bear interest and are recorded at amortized cost. The Company extends credit to approved casino patrons following background checks and investigations of creditworthiness. Business or economic conditions, the legal enforceability of gaming debts, foreign currency control measures or other significant events in foreign countries could affect the collectability of receivables from patrons in these countries.
Accounts receivable primarily consists of casino receivables. Other than casino receivables, there is no other concentration of credit risk with respect to accounts receivable. The Company believes the concentration of its credit risk in casino receivables is mitigated substantially by its credit evaluation process, credit policies, credit control and collection procedures, and also believes there are no concentrations of credit risk for which a provision has not been established. Although management believes the provision is adequate, it is possible the estimated amount of cash collections with respect to accounts receivable could change.
The Company maintains a provision for expected credit losses on casino, hotel and mall receivables and regularly evaluates the balances. The Company applies standard reserve percentages to aged account balances, which are grouped based on shared credit risk characteristics and days past due. The reserve percentages are based
LAS VEGAS SANDS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
on estimated loss rates supported by historical observed default rates over the expected life of the receivable and are adjusted for forward-looking information. The Company also specifically analyzes the collectability of each account with a balance over a specified dollar amount, based upon the age of the account, the patron's financial condition, collection history and any other known information and adjusts the aforementioned reserve with the results from the individual reserve analysis. The Company also monitors regional and global economic conditions and forecasts, which include the impact of the COVID-19 Pandemic, in its evaluation of the adequacy of the recorded reserves. Account balances are written off against the provision when the Company believes it is probable the receivable will not be recovered.
Accounts receivable, net, consists of the following:
| June 30, 2022 | December 31, 2021 | ||||||||||
| (In millions) | |||||||||||
| Casino | $ | 287 | $ | 313 | |||||||
| Rooms | 16 | 13 | |||||||||
| Mall | 27 | 91 | |||||||||
| Other | 39 | 17 | |||||||||
| 369 | 434 | ||||||||||
| Less - provision for credit losses | (211) | (232) | |||||||||
| $ | 158 | $ | 202 |
The following table shows the movement in the provision for credit losses recognized for accounts receivable:
| 2022 | 2021 | ||||||||||
| (In millions) | |||||||||||
| Balance at January 1 | $ | 232 | $ | 255 | |||||||
| Current period provision for credit losses | 6 | 6 | |||||||||
| Write-offs | (24) | (19) | |||||||||
| Exchange rate impact | (3) | (2) | |||||||||
| Balance at June 30 | $ | 211 | $ | 240 |
Customer Contract Related Liabilities
The Company provides numerous products and services to its patrons. There is often a timing difference between the cash payment by the patrons and recognition of revenue for each of the associated performance obligations. The Company has the following main types of liabilities associated with contracts with customers: (1) outstanding chip liability, (2) loyalty program liability and (3) customer deposits and other deferred revenue for gaming and non-gaming products and services yet to be provided.
The following table summarizes the liability activity related to contracts with customers:
| Outstanding Chip Liability | Loyalty Program Liability | Customer Deposits and Other Deferred Revenue**(1)** | |||||||||||||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||||||||||||||
| Balance at January 1 | $ | 74 | $ | 197 | $ | 61 | $ | 62 | $ | 618 | $ | 633 | |||||||||||||||||||||||
| Balance at June 30 | 68 | 139 | 63 | 62 | 574 | 607 | |||||||||||||||||||||||||||||
| Increase (decrease) | $ | (6) | $ | (58) | $ | 2 | $ | — | $ | (44) | $ | (26) |
(1)Of this amount, $144 million and $145 million as of June 30 and January 1, 2022, respectively, and $151 million and $152 million as of June 30 and January 1, 2021, respectively, relate to mall deposits that are accounted for based on lease terms usually greater than one year.
LAS VEGAS SANDS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
Note 6 — Earnings (Loss) Per Share
The weighted average number of common and common equivalent shares used in the calculation of basic and diluted earnings (loss) per share consisted of the following:
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||
| Weighted-average common shares outstanding (used in the calculation of basic earnings (loss) per share) | 764 | 764 | 764 | 764 | |||||||||||||||||||
| Potential dilution from stock options and restricted stock and stock units | — | — | — | — | |||||||||||||||||||
| Weighted-average common and common equivalent shares (used in the calculation of diluted earnings (loss) per share) | 764 | 764 | 764 | 764 | |||||||||||||||||||
| Antidilutive stock options excluded from the calculation of diluted earnings per share | 15 | 3 | 15 | 3 |
Note 7 — Income Taxes
The Company’s effective income tax rate from continuing operations was 14.4% for the six months ended June 30, 2022, compared to 1.4% for the six months ended June 30, 2021. The effective income tax rate for the six months ended June 30, 2022, reflects a 17% statutory tax rate on the Company’s Singapore operations and a 21% corporate income tax rate on its domestic operations. The Company's operations in Macao are subject to a 12% statutory income tax rate, but in connection with the 35% gaming tax, the Company’s subsidiaries in Macao and its peers received an income tax exemption on gaming operations through June 26, 2022. In July 2022, VML requested an additional extension of the income tax exemption for gaming operations through December 31, 2022; however, there is no assurance VML will receive the additional extension. In accordance with the interim accounting guidance, the Company calculated an estimated annual effective tax rate that is based on expected annual income and statutory rates in the jurisdictions in which the Company operates. This estimated annual effective tax rate is applied to actual year-to-date operating results to determine the provision for income taxes. For the three months ended June 30, 2022, the combination of losses in the U.S. and Macao and taxable income in Singapore resulted in a tax expense of $110 million on a loss before income taxes of $304 million. During the six months ended June 30, 2021, the Company recorded a valuation allowance of $20 million related to certain U.S. foreign tax credits, which it no longer expects to utilize due to lower forecasted U.S. taxable income in years following the sale of the Las Vegas Operations.
LAS VEGAS SANDS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
Note 8 — Leases
Lessor
Lease revenue for the Company’s mall operations consists of the following:
| Three Months Ended June 30, | |||||||||||||||||||||||
| 2022 | 2021 | ||||||||||||||||||||||
| Mall | Other | Mall | Other | ||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||
| Minimum rents | $ | 126 | $ | 1 | $ | 126 | $ | 1 | |||||||||||||||
| Overage rents | 12 | — | 17 | — | |||||||||||||||||||
| Rent concessions(1) | (12) | — | (17) | — | |||||||||||||||||||
| Total overage rents, rent concessions and other | — | — | — | — | |||||||||||||||||||
| $ | 126 | $ | 1 | $ | 126 | $ | 1 |
| Six Months Ended June 30, | |||||||||||||||||||||||
| 2022 | 2021 | ||||||||||||||||||||||
| Mall | Other | Mall | Other | ||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||
| Minimum rents | $ | 250 | $ | 1 | $ | 257 | $ | 1 | |||||||||||||||
| Overage rents | 26 | — | 34 | — | |||||||||||||||||||
| Rent concessions(1) | (24) | — | (37) | — | |||||||||||||||||||
| Other(2) | — | — | 6 | — | |||||||||||||||||||
| Total overage rents, rent concessions and other | 2 | — | 3 | — | |||||||||||||||||||
| $ | 252 | $ | 1 | $ | 260 | $ | 1 |
(1)Rent concessions were provided for the periods presented to tenants as a result of the COVID-19 Pandemic and the impact on mall operations.
(2)Amount related to a grant provided by the Singapore government to lessors to support small and medium enterprises impacted by the COVID-19 Pandemic in connection with their rent obligations.
Note 9 — Commitments and Contingencies
Litigation
The Company is involved in other litigation in addition to those noted below, arising in the normal course of business. Management has made certain estimates for potential litigation costs based upon consultation with legal counsel. Actual results could differ from these estimates; however, in the opinion of management, such litigation and claims will not have a material effect on the Company’s financial condition, results of operations and cash flows.
Asian American Entertainment Corporation, Limited v. Venetian Macau Limited, et al.
On February 5, 2007, Asian American Entertainment Corporation, Limited (“AAEC” or “Plaintiff”) brought a claim (the “Prior Action”) in the U.S. District Court for the District of Nevada (the “U.S. District Court”) against Las Vegas Sands, Inc. (now known as Las Vegas Sands, LLC (“LVSLLC”)), Venetian Casino Resort, LLC (“VCR”) and Venetian Venture Development, LLC, which are subsidiaries of the Company, and William P. Weidner and David Friedman, who are former executives of the Company. The Prior Action sought damages based on an alleged breach of agreements entered into between AAEC and the aforementioned defendants for their joint presentation of a bid in response to the public tender held by the Macao government for the award of gaming concessions at the end of 2001. The U.S. District Court entered an order dismissing the Prior Action on April 16, 2010.
LAS VEGAS SANDS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
On January 19, 2012, AAEC filed another claim (the “Macao Action”) with the Macao Judicial Court against VML, LVS (Nevada) International Holdings, Inc. (“LVS (Nevada)”), LVSLLC and VCR (collectively, the “Defendants”). The claim was for 3.0 billion patacas (approximately $371 million at exchange rates in effect on June 30, 2022). The Macao Action alleges a breach of agreements entered into between AAEC and LVS (Nevada), LVSLLC and VCR (collectively, the “U.S. Defendants”) for their joint presentation of a bid in response to the public tender held by the Macao government for the award of gaming concessions at the end of 2001. On July 4, 2012, the Defendants filed their defense to the Macao Action with the Macao Judicial Court and amended the defense on January 4, 2013.
On March 24, 2014, the Macao Judicial Court issued a decision holding that AAEC’s claim against VML is unfounded and that VML be removed as a party to the proceedings, and the claim should proceed exclusively against the U.S. Defendants. On May 8, 2014, AAEC lodged an appeal against that decision and the appeal is currently pending.
On June 5, 2015, the U.S. Defendants applied to the Macao Judicial Court to dismiss the claims against them as res judicata based on the dismissal of the Prior Action. On March 16, 2016, the Macao Judicial Court dismissed the defense of res judicata. An appeal against that decision was lodged by U.S. Defendants on April 7, 2016. As of the end of December 2016, all appeals (including VML’s dismissal and the res judicata appeals) were being transferred to the Macao Second Instance Court. On May 11, 2017, the Macao Second Instance Court notified the parties of its decision of refusal to deal with the appeals at the present time. The Macao Second Instance Court ordered the court file be transferred back to the Macao Judicial Court. Evidence gathering by the Macao Judicial Court commenced by letters rogatory, which was completed on March 14, 2019, and the trial of this matter was scheduled for September 2019.
On July 15, 2019, AAEC submitted a request to the Macao Judicial Court to increase the amount of its claim to 96.45 billion patacas (approximately $11.93 billion at exchange rates in effect on June 30, 2022), allegedly representing lost profits from 2004 to 2018, and reserving its right to claim for lost profits up to 2022 in due course at the enforcement stage. On September 4, 2019, the Macao Judicial Court allowed AAEC’s request to increase the amount of its claim. On September 17, 2019, the U.S. Defendants appealed the decision granting AAEC’s request and that appeal is currently pending.
On June 18, 2020, the U.S. Defendants moved to reschedule the trial, which had been scheduled to begin on September 16, 2020, due to travel disruptions and other extraordinary circumstances resulting from the ongoing COVID-19 Pandemic. The Macao Judicial Court granted that motion and rescheduled the trial to begin on June 16, 2021. On April 16, 2021, the U.S. Defendants again moved to reschedule the trial because continued travel disruptions resulting from the pandemic prevented the representatives of the U.S. Defendants and certain witnesses from attending the trial as scheduled. Plaintiff opposed that motion on April 29, 2021. The Macao Judicial Court denied the U.S. Defendants’ motion on May 28, 2021, concluding that, under Macao law, it lacked the power to reschedule the trial absent agreement of the parties. The U.S. Defendants appealed that ruling on June 16, 2021, and that appeal is currently pending.
The trial began as scheduled on June 16, 2021. The Macao Judicial Court heard testimony on June 16, 17, 23, and July 1. By order dated June 17, 2021, the Macao Judicial Court scheduled additional trial dates during September, October and December 2021 to hear witnesses who are currently subject to COVID-19 travel restrictions that prevent or severely limit their ability to enter Macao. That order also provided a procedure for the parties to request written testimony from witnesses who are not able to travel to Macao on those dates. On June 28, 2021, the U.S. Defendants sought clarification of certain aspects of that ruling concerning procedures for written testimony and appealed aspects of that ruling setting limits on written testimony, imposing a deadline for in-person testimony, and rejecting the U.S. Defendants’ request to have witnesses testify via video conference. On July 9, 2021, the Macao Judicial Court issued an order clarifying the procedure for written testimony. The U.S. Defendants’ appeal on the remainder of the Macao Judicial Court’s June 17, 2021 order is currently pending.
On July 10, 2021, the U.S. Defendants were notified of an invoice for supplemental court fees totaling 93 million patacas (approximately $12 million at exchange rates in effect on June 30, 2022) based on Plaintiff’s July 15, 2019 amendment of its claim amount. By motion dated July 20, 2021, the U.S. Defendants moved the Macao
LAS VEGAS SANDS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
Judicial Court for an order withdrawing that invoice on the grounds that it was procedurally improper and conflicted with rights guaranteed in Macao’s Basic Law. The Macao Judicial Court denied that motion by order dated September 11, 2021. The U.S. Defendants appealed that order on September 23, 2021, and that appeal is currently pending. By order dated September 29, 2021, the Macao Judicial Court ordered that the invoice for supplemental court fees be stayed pending resolution of that appeal.
The Macao Judicial Court heard additional testimony on October 8, 11, and 15, and December 14 and 15, 2021. Certain witnesses who were not able to enter Macao due to ongoing COVID-19 travel restrictions presented testimony in writing. On December 15, 2021, the U.S. Defendants sought to initiate a proceeding to impeach the testimony of certain witnesses offered by Plaintiff, and the Macao Judicial Court admitted that incident and ordered Plaintiff to produce its shareholder registry. By notice dated December 16, 2021, Plaintiff appealed the order to produce its shareholder registry, and that appeal is currently pending.
From December 17, 2021 to January 19, 2022, Plaintiff submitted additional documents to the court file and disclosed written reports from two purported experts, who calculated Plaintiff’s damages at 57.88 billion patacas and 62.29 billion patacas (approximately $7.16 billion and $7.71 billion, respectively, at exchange rates in effect on June 30, 2022). In response, the U.S. Defendants moved to exclude those materials or, in the alternative, to require additional testimony from relevant witnesses. By order dated January 19, 2022, the Macao Judicial Court denied the U.S. Defendants’ motion and ruled that the materials could be included in the court file with the probative value of their contents to be determined by the Court.
Plaintiff presented its factual summation on January 21, 2022. On January 26, 2022, the U.S. Defendants presented their factual summation, and Plaintiff and the U.S. Defendants presented rebuttal summations. The Macao Judicial Court announced its proposed findings on disputed facts at a February 15, 2022 hearing. The Plaintiff filed its brief on points of law with the Macao Judicial Court on March 1, 2022, and the U.S. Defendants filed their brief on points of law on March 10, 2022. On April 28, 2022, the Macao Judicial Court entered a judgment for the U.S. Defendants. The Macao Judicial Court also held that Plaintiff litigated certain aspects of its case in bad faith. Plaintiff filed a notice of appeal from the Macao Judicial Court’s judgment on May 13, 2022, and that appeal is currently pending. Management has determined that, based on proceedings to date, it is currently unable to determine the probability of the outcome of this matter or the range of reasonably possible loss, if any. The Company intends to defend this matter vigorously.
The Daniels Family 2001 Revocable Trust v. LVSC, et al.
On October 22, 2020, The Daniels Family 2001 Revocable Trust, a putative purchaser of the Company’s shares, filed a purported class action complaint in the U.S. District Court against LVSC, Sheldon G. Adelson and Patrick Dumont. The complaint asserts violations of Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 (the “Exchange Act”) and alleges that LVSC made materially false or misleading statements, or failed to disclose material facts, from February 27, 2016 through September 15, 2020, with respect to its operations at the Marina Bay Sands, its compliance with Singapore laws and regulations, and its disclosure controls and procedures. On January 5, 2021, the U.S. District Court entered an order appointing Carl S. Ciaccio and Donald M. DeSalvo as lead plaintiffs (“Lead Plaintiffs”). On March 8, 2021, Lead Plaintiffs filed a purported class action amended complaint against LVSC, Sheldon G. Adelson, Patrick Dumont, and Robert G. Goldstein, alleging similar violations of Sections 10(b) and 20(a) of the Exchange Act over the same time period of February 27, 2016 through September 15, 2020. On March 22, 2021, the U.S. District Court granted Lead Plaintiffs’ motion to substitute Dr. Miriam Adelson, in her capacity as the Special Administrator for the estate of Sheldon G. Adelson, for Sheldon G. Adelson as a defendant in this action. On May 7, 2021, the defendants filed a motion to dismiss the amended complaint. Lead Plaintiffs filed an opposition to the motion to dismiss on July 6, 2021, and the defendants filed their reply on August 5, 2021. On March 28, 2022, the U.S. District Court entered an order dismissing the amended complaint in its entirety. The U.S. District Court dismissed certain claims with prejudice but granted Lead Plaintiffs leave to amend the complaint with respect to the other claims by April 18, 2022. On April 8, 2022, Lead Plaintiffs filed a Motion for Reconsideration and to Extend Time to File the Amended Complaint, requesting the U.S. District Court reconsider certain aspects of its March 28, 2022 order, and to extend the deadline for Lead Plaintiffs to file an amended complaint. The defendants filed an opposition to the motion on April 22, 2022. On April 18, 2022, Lead Plaintiffs filed a second amended complaint. On May 18, 2022, the defendants filed a motion to dismiss the second
LAS VEGAS SANDS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
amended complaint. Lead Plaintiffs filed an opposition to the motion to dismiss on June 17, 2022, and the defendants filed their reply on July 8, 2022. This action is in a preliminary stage and management has determined that based on proceedings to date, it is currently unable to determine the probability of the outcome of this matter or the range of reasonably possible loss, if any. The Company intends to defend this matter vigorously.
Turesky v. Sheldon G. Adelson, et al.
On December 28, 2020, Andrew Turesky filed a putative shareholder derivative action on behalf of the Company in the U.S. District Court, against Sheldon G. Adelson, Patrick Dumont, Robert G. Goldstein, Irwin Chafetz, Micheline Chau, Charles D. Forman, Steven L. Gerard, George Jamieson, Charles A. Koppelman, Lewis Kramer and David F. Levi, all of whom are current or former directors and/or officers of LVSC. The complaint asserts claims for breach of fiduciary duty, unjust enrichment, waste of corporate assets, abuse of control, gross mismanagement, violations of Sections 10(b), 14(a) and 20(a) of the Exchange Act and for contribution under Sections 10(b) and 21D of the Exchange Act. On February 24, 2021, the U.S. District Court entered an order granting the parties’ stipulation to stay this action in light of the Daniels Family 2001 Revocable Trust putative securities class action (the “Securities Action”). Subject to the terms of the parties’ stipulation, this action is stayed until 30 days after the final resolution of the motion to dismiss in the Securities Action. On March 11, 2021, the U.S. District Court granted the plaintiff’s motion to substitute Dr. Miriam Adelson, in her capacity as the Special Administrator for the estate of Sheldon G. Adelson, for Sheldon G. Adelson as a defendant in this action. This action is in a preliminary stage and management has determined that based on proceedings to date, it is currently unable to determine the probability of the outcome of this matter or the range of reasonably possible loss, if any. The Company intends to defend this matter vigorously.
Note 10 — Segment Information
The Company’s principal operating and developmental activities occur in two geographic areas: Macao and Singapore. The Company reviews the results of operations and construction and development activities for each of its operating segments: The Venetian Macao; The Londoner Macao; The Parisian Macao; The Plaza Macao and Four Seasons Macao; Sands Macao; and Marina Bay Sands. The Company has included Ferry Operations and Other (comprised primarily of the Company’s ferry operations and various other operations that are ancillary to its properties in Macao) and Corporate and Other to reconcile to the condensed consolidated results of operations and financial condition. The operations that comprised the Company’s former Las Vegas Operating Properties reportable business segment were classified as a discontinued operation and the information below for the three and six months ended June 30, 2022 and 2021, excludes these results.
LAS VEGAS SANDS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
The Company’s segment information as of June 30, 2022 and December 31, 2021, and for the three and six months ended June 30, 2022 and 2021 is as follows:
| Casino | Rooms | Food and Beverage | Mall | Convention, Retail and Other | Net Revenues | ||||||||||||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||||||||||||||
| Three Months Ended June 30, 2022 | |||||||||||||||||||||||||||||||||||
| Macao: | |||||||||||||||||||||||||||||||||||
| The Venetian Macao | $ | 91 | $ | 12 | $ | 3 | $ | 41 | $ | 3 | $ | 150 | |||||||||||||||||||||||
| The Londoner Macao | 42 | 14 | 7 | 12 | 4 | 79 | |||||||||||||||||||||||||||||
| The Parisian Macao | 24 | 7 | 3 | 7 | 1 | 42 | |||||||||||||||||||||||||||||
| The Plaza Macao and Four Seasons Macao | 38 | 6 | 1 | 33 | 1 | 79 | |||||||||||||||||||||||||||||
| Sands Macao | 14 | 2 | 1 | — | — | 17 | |||||||||||||||||||||||||||||
| Ferry Operations and Other | — | — | — | — | 7 | 7 | |||||||||||||||||||||||||||||
| 209 | 41 | 15 | 93 | 16 | 374 | ||||||||||||||||||||||||||||||
| Marina Bay Sands | 500 | 56 | 48 | 55 | 20 | 679 | |||||||||||||||||||||||||||||
| Intercompany royalties | — | — | — | — | 28 | 28 | |||||||||||||||||||||||||||||
| Intercompany eliminations(1) | — | — | — | — | (36) | (36) | |||||||||||||||||||||||||||||
| Total net revenues | $ | 709 | $ | 97 | $ | 63 | $ | 148 | $ | 28 | $ | 1,045 | |||||||||||||||||||||||
| Three Months Ended June 30, 2021 | |||||||||||||||||||||||||||||||||||
| Macao: | |||||||||||||||||||||||||||||||||||
| The Venetian Macao | $ | 307 | $ | 24 | $ | 7 | $ | 49 | $ | 4 | $ | 391 | |||||||||||||||||||||||
| The Londoner Macao | 133 | 28 | 9 | 16 | 3 | 189 | |||||||||||||||||||||||||||||
| The Parisian Macao | 69 | 17 | 4 | 10 | 1 | 101 | |||||||||||||||||||||||||||||
| The Plaza Macao and Four Seasons Macao | 74 | 12 | 5 | 34 | — | 125 | |||||||||||||||||||||||||||||
| Sands Macao | 37 | 2 | 1 | 1 | 1 | 42 | |||||||||||||||||||||||||||||
| Ferry Operations and Other | — | — | — | — | 7 | 7 | |||||||||||||||||||||||||||||
| 620 | 83 | 26 | 110 | 16 | 855 | ||||||||||||||||||||||||||||||
| Marina Bay Sands | 223 | 32 | 24 | 39 | 9 | 327 | |||||||||||||||||||||||||||||
| Intercompany royalties | — | — | — | — | 25 | 25 | |||||||||||||||||||||||||||||
| Intercompany eliminations(1) | — | — | — | (1) | (33) | (34) | |||||||||||||||||||||||||||||
| Total net revenues | $ | 843 | $ | 115 | $ | 50 | $ | 148 | $ | 17 | $ | 1,173 | |||||||||||||||||||||||
LAS VEGAS SANDS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
| Casino | Rooms | Food and Beverage | Mall | Convention, Retail and Other | Net Revenues | ||||||||||||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||||||||||||||
| Six Months Ended June 30, 2022 | |||||||||||||||||||||||||||||||||||
| Macao: | |||||||||||||||||||||||||||||||||||
| The Venetian Macao | $ | 248 | $ | 28 | $ | 9 | $ | 85 | $ | 7 | $ | 377 | |||||||||||||||||||||||
| The Londoner Macao | 121 | 33 | 15 | 26 | 5 | 200 | |||||||||||||||||||||||||||||
| The Parisian Macao | 75 | 18 | 6 | 15 | 2 | 116 | |||||||||||||||||||||||||||||
| The Plaza Macao and Four Seasons Macao | 93 | 15 | 5 | 67 | 1 | 181 | |||||||||||||||||||||||||||||
| Sands Macao | 31 | 4 | 2 | — | — | 37 | |||||||||||||||||||||||||||||
| Ferry Operations and Other | — | — | — | — | 14 | 14 | |||||||||||||||||||||||||||||
| 568 | 98 | 37 | 193 | 29 | 925 | ||||||||||||||||||||||||||||||
| Marina Bay Sands | 768 | 94 | 79 | 104 | 33 | 1,078 | |||||||||||||||||||||||||||||
| Intercompany royalties | — | — | — | — | 50 | 50 | |||||||||||||||||||||||||||||
| Intercompany eliminations(1) | — | — | — | — | (65) | (65) | |||||||||||||||||||||||||||||
| Total net revenues | $ | 1,336 | $ | 192 | $ | 116 | $ | 297 | $ | 47 | $ | 1,988 | |||||||||||||||||||||||
| Six Months Ended June 30, 2021 | |||||||||||||||||||||||||||||||||||
| Macao: | |||||||||||||||||||||||||||||||||||
| The Venetian Macao | $ | 573 | $ | 43 | $ | 13 | $ | 95 | $ | 7 | $ | 731 | |||||||||||||||||||||||
| The Londoner Macao | 224 | 47 | 16 | 30 | 9 | 326 | |||||||||||||||||||||||||||||
| The Parisian Macao | 128 | 29 | 9 | 20 | 2 | 188 | |||||||||||||||||||||||||||||
| The Plaza Macao and Four Seasons Macao | 189 | 23 | 9 | 73 | 1 | 295 | |||||||||||||||||||||||||||||
| Sands Macao | 68 | 5 | 2 | 1 | 1 | 77 | |||||||||||||||||||||||||||||
| Ferry Operations and Other | — | — | — | — | 15 | 15 | |||||||||||||||||||||||||||||
| 1,182 | 147 | 49 | 219 | 35 | 1,632 | ||||||||||||||||||||||||||||||
| Marina Bay Sands | 526 | 64 | 57 | 86 | 20 | 753 | |||||||||||||||||||||||||||||
| Intercompany royalties | — | — | — | — | 50 | 50 | |||||||||||||||||||||||||||||
| Intercompany eliminations(1) | — | — | — | (1) | (65) | (66) | |||||||||||||||||||||||||||||
| Total net revenues | $ | 1,708 | $ | 211 | $ | 106 | $ | 304 | $ | 40 | $ | 2,369 |
(1)Intercompany eliminations include royalties and other intercompany services.
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||
| Intersegment Revenues | |||||||||||||||||||||||
| Macao: | |||||||||||||||||||||||
| The Venetian Macao | $ | 1 | $ | 1 | $ | 3 | $ | 2 | |||||||||||||||
| Ferry Operations and Other | 6 | 7 | 11 | 12 | |||||||||||||||||||
| 7 | 8 | 14 | 14 | ||||||||||||||||||||
| Marina Bay Sands | 1 | 1 | 1 | 2 | |||||||||||||||||||
| Intercompany royalties | 28 | 25 | 50 | 50 | |||||||||||||||||||
| Total intersegment revenues | $ | 36 | $ | 34 | $ | 65 | $ | 66 |
LAS VEGAS SANDS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||
| Adjusted Property EBITDA | |||||||||||||||||||||||
| Macao: | |||||||||||||||||||||||
| The Venetian Macao | $ | (21) | $ | 108 | $ | (2) | $ | 190 | |||||||||||||||
| The Londoner Macao | (54) | (5) | (87) | (28) | |||||||||||||||||||
| The Parisian Macao | (29) | — | (40) | (8) | |||||||||||||||||||
| The Plaza Macao and Four Seasons Macao | 17 | 44 | 49 | 114 | |||||||||||||||||||
| Sands Macao | (22) | (13) | (39) | (31) | |||||||||||||||||||
| Ferry Operations and Other | (1) | (2) | (2) | (5) | |||||||||||||||||||
| (110) | 132 | (121) | 232 | ||||||||||||||||||||
| Marina Bay Sands | 319 | 112 | 440 | 256 | |||||||||||||||||||
| Consolidated adjusted property EBITDA(1) | 209 | 244 | 319 | 488 | |||||||||||||||||||
| Other Operating Costs and Expenses | |||||||||||||||||||||||
| Stock-based compensation(2) | (6) | (3) | (11) | (8) | |||||||||||||||||||
| Corporate | (55) | (56) | (114) | (105) | |||||||||||||||||||
| Pre-opening | (3) | (4) | (7) | (9) | |||||||||||||||||||
| Development | (22) | (37) | (82) | (46) | |||||||||||||||||||
| Depreciation and amortization | (256) | (258) | (520) | (513) | |||||||||||||||||||
| Amortization of leasehold interests in land | (14) | (14) | (28) | (28) | |||||||||||||||||||
| Loss on disposal or impairment of assets | — | (11) | (6) | (14) | |||||||||||||||||||
| Operating loss | (147) | (139) | (449) | (235) | |||||||||||||||||||
| Other Non-Operating Costs and Expenses | |||||||||||||||||||||||
| Interest income | 14 | 1 | 18 | 2 | |||||||||||||||||||
| Interest expense, net of amounts capitalized | (162) | (158) | (318) | (312) | |||||||||||||||||||
| Other income (expense) | (9) | 10 | (31) | (7) | |||||||||||||||||||
| Income tax (expense) benefit | (110) | 6 | (112) | (8) | |||||||||||||||||||
| Net loss from continuing operations | $ | (414) | $ | (280) | $ | (892) | $ | (560) |
(1)Consolidated adjusted property EBITDA, which is a non-GAAP financial measure, is net income (loss) from continuing operations before stock-based compensation expense, corporate expense, pre-opening expense, development expense, depreciation and amortization, amortization of leasehold interests in land, gain or loss on disposal or impairment of assets, interest, other income or expense, gain or loss on modification or early retirement of debt and income taxes. Consolidated adjusted property EBITDA is a supplemental non-GAAP financial measure used by management, as well as industry analysts, to evaluate operations and operating performance. In particular, management utilizes consolidated adjusted property EBITDA to compare the operating profitability of its operations with those of its competitors, as well as a basis for determining certain incentive compensation. Integrated Resort companies have historically reported adjusted property EBITDA as a supplemental performance measure to GAAP financial measures. In order to view the operations of their properties on a more stand-alone basis, Integrated Resort companies, including Las Vegas Sands Corp., have historically excluded certain expenses that do not relate to the management of specific properties, such as pre-opening expense, development expense and corporate expense, from their adjusted property EBITDA calculations. Consolidated adjusted property EBITDA should not be interpreted as an alternative to income from operations (as an indicator of operating performance) or to cash flows from operations (as a measure of liquidity), in each case, as determined in accordance with GAAP. The Company has significant uses of cash flow, including capital expenditures, dividend payments, interest payments, debt principal repayments and income taxes, which are not reflected in consolidated adjusted property EBITDA. Not all companies calculate adjusted property EBITDA in the same manner. As a result, consolidated adjusted property EBITDA as presented by the Company may not be directly comparable to similarly titled measures presented by other companies.
LAS VEGAS SANDS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
(2)During the three months ended June 30, 2022 and 2021, the Company recorded stock-based compensation expense of $15 million and $7 million, respectively, of which $9 million and $4 million, respectively, was included in corporate expense in the accompanying condensed consolidated statements of operations. During the six months ended June 30, 2022 and 2021, the Company recorded stock-based compensation expense of $29 million and $14 million, respectively, of which $18 million and $6 million, respectively, was included in corporate expense in the accompanying condensed consolidated statements of operations.
| Six Months Ended June 30, | |||||||||||
| 2022 | 2021 | ||||||||||
| (In millions) | |||||||||||
| Capital Expenditures | |||||||||||
| Corporate and Other | $ | 37 | $ | 1 | |||||||
| Macao: | |||||||||||
| The Venetian Macao | 25 | 38 | |||||||||
| The Londoner Macao | 118 | 347 | |||||||||
| The Parisian Macao | 1 | 2 | |||||||||
| The Plaza Macao and Four Seasons Macao | 5 | 6 | |||||||||
| Sands Macao | 2 | 3 | |||||||||
| Ferry Operations and Other | — | 1 | |||||||||
| 151 | 397 | ||||||||||
| Marina Bay Sands | 147 | 50 | |||||||||
| Total capital expenditures | $ | 335 | $ | 448 |
| June 30, 2022 | December 31, 2021 | ||||||||||
| (In millions) | |||||||||||
| Total Assets | |||||||||||
| Corporate and Other | $ | 6,881 | $ | 1,357 | |||||||
| Macao: | |||||||||||
| The Venetian Macao | 2,018 | 2,087 | |||||||||
| The Londoner Macao | 4,292 | 4,494 | |||||||||
| The Parisian Macao | 1,872 | 1,962 | |||||||||
| The Plaza Macao and Four Seasons Macao | 1,048 | 1,145 | |||||||||
| Sands Macao | 227 | 253 | |||||||||
| Ferry Operations and Other | 292 | 132 | |||||||||
| 9,749 | 10,073 | ||||||||||
| Marina Bay Sands | 5,429 | 5,326 | |||||||||
| Total assets | $ | 22,059 | $ | 16,756 |
LAS VEGAS SANDS CORP. AND SUBSIDIARIES
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