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, 2023 | December 31, 2022 | ||||||||||
| (In millions, except par value) (Unaudited) | |||||||||||
| ASSETS | |||||||||||
| Current assets: | |||||||||||
| Cash and cash equivalents | $ | 5,768 | $ | 6,311 | |||||||
| Accounts receivable, net of provision for credit losses of $203 and $217 | 336 | 267 | |||||||||
| Inventories | 32 | 28 | |||||||||
| Prepaid expenses and other | 154 | 138 | |||||||||
| Total current assets | 6,290 | 6,744 | |||||||||
| Loan receivable | 1,179 | 1,165 | |||||||||
| Property and equipment, net | 11,591 | 11,451 | |||||||||
| Restricted cash | 124 | 125 | |||||||||
| Deferred income taxes, net | 136 | 131 | |||||||||
| Leasehold interests in land, net | 2,075 | 2,128 | |||||||||
| Goodwill and intangible assets, net | 631 | 64 | |||||||||
| Other assets, net | 244 | 231 | |||||||||
| Total assets | $ | 22,270 | $ | 22,039 | |||||||
| LIABILITIES AND EQUITY | |||||||||||
| Current liabilities: | |||||||||||
| Accounts payable | $ | 135 | $ | 89 | |||||||
| Construction payables | 179 | 189 | |||||||||
| Other accrued liabilities | 1,719 | 1,458 | |||||||||
| Income taxes payable | 171 | 135 | |||||||||
| Current maturities of long-term debt | 71 | 2,031 | |||||||||
| Total current liabilities | 2,275 | 3,902 | |||||||||
| Other long-term liabilities | 842 | 382 | |||||||||
| Deferred income taxes | 145 | 152 | |||||||||
| Long-term debt | 14,849 | 13,947 | |||||||||
| Total liabilities | 18,111 | 18,383 | |||||||||
| Commitments and contingencies (Note 8) | |||||||||||
| 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 | 6,708 | 6,684 | |||||||||
| Accumulated other comprehensive loss | (41) | (7) | |||||||||
| Retained earnings | 2,143 | 1,684 | |||||||||
| Total Las Vegas Sands Corp. stockholders’ equity | 4,330 | 3,881 | |||||||||
| Noncontrolling interests | (171) | (225) | |||||||||
| Total equity | 4,159 | 3,656 | |||||||||
| Total liabilities and equity | $ | 22,270 | $ | 22,039 |
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, | ||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
| (In millions, except per share data) (Unaudited) | |||||||||||||||||||||||
| Revenues: | |||||||||||||||||||||||
| Casino | $ | 1,862 | $ | 709 | $ | 3,403 | $ | 1,336 | |||||||||||||||
| Rooms | 296 | 97 | 539 | 192 | |||||||||||||||||||
| Food and beverage | 143 | 63 | 267 | 116 | |||||||||||||||||||
| Mall | 172 | 148 | 334 | 297 | |||||||||||||||||||
| Convention, retail and other | 69 | 28 | 119 | 47 | |||||||||||||||||||
| Net revenues | 2,542 | 1,045 | 4,662 | 1,988 | |||||||||||||||||||
| Operating expenses: | |||||||||||||||||||||||
| Casino | 1,034 | 445 | 1,908 | 913 | |||||||||||||||||||
| Rooms | 71 | 41 | 127 | 84 | |||||||||||||||||||
| Food and beverage | 117 | 73 | 221 | 138 | |||||||||||||||||||
| Mall | 21 | 19 | 42 | 37 | |||||||||||||||||||
| Convention, retail and other | 50 | 24 | 89 | 46 | |||||||||||||||||||
| Provision for (recovery of) credit losses | 5 | 2 | (1) | 6 | |||||||||||||||||||
| General and administrative | 279 | 238 | 530 | 456 | |||||||||||||||||||
| Corporate | 60 | 55 | 117 | 114 | |||||||||||||||||||
| Pre-opening | 8 | 3 | 10 | 7 | |||||||||||||||||||
| Development | 54 | 22 | 96 | 82 | |||||||||||||||||||
| Depreciation and amortization | 288 | 256 | 562 | 520 | |||||||||||||||||||
| Amortization of leasehold interests in land | 14 | 14 | 28 | 28 | |||||||||||||||||||
| Loss on disposal or impairment of assets | 4 | — | 18 | 6 | |||||||||||||||||||
| 2,005 | 1,192 | 3,747 | 2,437 | ||||||||||||||||||||
| Operating income (loss) | 537 | (147) | 915 | (449) | |||||||||||||||||||
| Other income (expense): | |||||||||||||||||||||||
| Interest income | 76 | 14 | 146 | 18 | |||||||||||||||||||
| Interest expense, net of amounts capitalized | (210) | (162) | (428) | (318) | |||||||||||||||||||
| Other income (expense) | 14 | (9) | (21) | (31) | |||||||||||||||||||
| Income (loss) from continuing operations before income taxes | 417 | (304) | 612 | (780) | |||||||||||||||||||
| Income tax expense | (49) | (110) | (99) | (112) | |||||||||||||||||||
| Net income (loss) from continuing operations | 368 | (414) | 513 | (892) | |||||||||||||||||||
| Discontinued operations: | |||||||||||||||||||||||
| Income from operations of discontinued operations, net of tax | — | — | — | 46 | |||||||||||||||||||
| 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) | — | 2,904 | |||||||||||||||||||
| Net income (loss) | 368 | (417) | 513 | 2,012 | |||||||||||||||||||
| Net (income) loss attributable to noncontrolling interests from continuing operations | (56) | 127 | (54) | 228 | |||||||||||||||||||
| Net income (loss) attributable to Las Vegas Sands Corp. | $ | 312 | $ | (290) | $ | 459 | $ | 2,240 | |||||||||||||||
| Earnings (loss) per share - basic: | |||||||||||||||||||||||
| Income (loss) from continuing operations | $ | 0.41 | $ | (0.38) | $ | 0.60 | $ | (0.87) | |||||||||||||||
| Income from discontinued operations, net of tax | — | — | — | 3.80 | |||||||||||||||||||
| Net income (loss) attributable to Las Vegas Sands Corp. | $ | 0.41 | $ | (0.38) | $ | 0.60 | $ | 2.93 | |||||||||||||||
| Earnings (loss) per share - diluted: | |||||||||||||||||||||||
| Income (loss) from continuing operations | $ | 0.41 | $ | (0.38) | $ | 0.60 | $ | (0.87) | |||||||||||||||
| Income from discontinued operations, net of tax | — | — | — | 3.80 | |||||||||||||||||||
| Net income (loss) attributable to Las Vegas Sands Corp. | $ | 0.41 | $ | (0.38) | $ | 0.60 | $ | 2.93 | |||||||||||||||
| Weighted average shares outstanding: | |||||||||||||||||||||||
| Basic | 764 | 764 | 764 | 764 | |||||||||||||||||||
| Diluted | 767 | 764 | 767 | 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, | ||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
| (In millions) (Unaudited) | |||||||||||||||||||||||
| Net income (loss) | $ | 368 | $ | (417) | $ | 513 | $ | 2,012 | |||||||||||||||
| Currency translation adjustment | (52) | (61) | (29) | (65) | |||||||||||||||||||
| Cash flow hedge fair value adjustment | (1) | 6 | (6) | — | |||||||||||||||||||
| Total comprehensive income (loss) | 315 | (472) | 478 | 1,947 | |||||||||||||||||||
| Comprehensive (income) loss attributable to noncontrolling interests | (55) | 125 | (53) | 229 | |||||||||||||||||||
| Comprehensive income (loss) attributable to Las Vegas Sands Corp. | $ | 260 | $ | (347) | $ | 425 | $ | 2,176 |
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, 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 | |||||||||||||||||||||||||||
| Balance at March 31, 2023 | $ | 1 | $ | (4,481) | $ | 6,694 | $ | 11 | $ | 1,831 | $ | (227) | $ | 3,829 | |||||||||||||||||||||||||||
| Net income | — | — | — | — | 312 | 56 | 368 | ||||||||||||||||||||||||||||||||||
| Currency translation adjustment | — | — | — | (51) | — | (1) | (52) | ||||||||||||||||||||||||||||||||||
| Cash flow hedge fair value adjustment | — | — | — | (1) | — | — | (1) | ||||||||||||||||||||||||||||||||||
| Exercise of stock options | — | — | 3 | — | — | — | 3 | ||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | 11 | — | — | 1 | 12 | ||||||||||||||||||||||||||||||||||
| Balance at June 30, 2023 | $ | 1 | $ | (4,481) | $ | 6,708 | $ | (41) | $ | 2,143 | $ | (171) | $ | 4,159 | |||||||||||||||||||||||||||
| Balance at January 1, 2023 | $ | 1 | $ | (4,481) | $ | 6,684 | $ | (7) | $ | 1,684 | $ | (225) | $ | 3,656 | |||||||||||||||||||||||||||
| Net income | — | — | — | — | 459 | 54 | 513 | ||||||||||||||||||||||||||||||||||
| Currency translation adjustment | — | — | — | (29) | — | — | (29) | ||||||||||||||||||||||||||||||||||
| Cash flow hedge fair value adjustment | — | — | — | (5) | — | (1) | (6) | ||||||||||||||||||||||||||||||||||
| Exercise of stock options | — | — | 3 | — | — | — | 3 | ||||||||||||||||||||||||||||||||||
| Stock-based compensation | — | — | 22 | — | — | 1 | 23 | ||||||||||||||||||||||||||||||||||
| Tax withholding on vesting of equity awards | — | — | (1) | — | — | — | (1) | ||||||||||||||||||||||||||||||||||
| Balance at June 30, 2023 | $ | 1 | $ | (4,481) | $ | 6,708 | $ | (41) | $ | 2,143 | $ | (171) | $ | 4,159 |
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, | |||||||||||
| 2023 | 2022 | ||||||||||
| (In millions) (Unaudited) | |||||||||||
| Cash flows from operating activities from continuing operations: | |||||||||||
| Net income (loss) from continuing operations | $ | 513 | $ | (892) | |||||||
| Adjustments to reconcile net income (loss) to net cash generated from (used in) operating activities: | |||||||||||
| Depreciation and amortization | 562 | 520 | |||||||||
| Amortization of leasehold interests in land | 28 | 28 | |||||||||
| Amortization of deferred financing costs and original issue discount | 31 | 28 | |||||||||
| Change in fair value of derivative asset/liability | (3) | (1) | |||||||||
| Paid-in-kind interest income | (14) | — | |||||||||
| Loss on disposal or impairment of assets | 8 | 5 | |||||||||
| Stock-based compensation expense | 22 | 20 | |||||||||
| Provision for (recovery of) credit losses | (1) | 6 | |||||||||
| Foreign exchange loss | 24 | 31 | |||||||||
| Deferred income taxes | (10) | (47) | |||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable | (71) | 35 | |||||||||
| Other assets | (34) | 6 | |||||||||
| Accounts payable | 46 | (1) | |||||||||
| Other liabilities | 281 | (428) | |||||||||
| Net cash generated from (used in) operating activities from continuing operations | 1,382 | (690) | |||||||||
| Cash flows from investing activities from continuing operations: | |||||||||||
| Capital expenditures | (362) | (335) | |||||||||
| Proceeds from disposal of property and equipment | — | 6 | |||||||||
| Acquisition of intangible assets and other | (239) | (103) | |||||||||
| Net cash used in investing activities from continuing operations | (601) | (432) | |||||||||
| Cash flows from financing activities from continuing operations: | |||||||||||
| Proceeds from exercise of stock options | 3 | — | |||||||||
| Tax withholding on vesting of equity awards | (1) | (1) | |||||||||
| Proceeds from long-term debt | — | 700 | |||||||||
| Repayments of long-term debt | (1,287) | (35) | |||||||||
| Payments of financing costs | (1) | (9) | |||||||||
| Other | (21) | — | |||||||||
| Transactions with discontinued operations | — | 5,032 | |||||||||
| Net cash generated from (used in) financing activities from continuing operations | (1,307) | 5,687 | |||||||||
| Cash flows from discontinued operations: | |||||||||||
| Net cash generated from operating activities | — | 149 | |||||||||
| Net cash generated from investing activities | — | 4,883 | |||||||||
| Net cash used in financing activities | — | (5,032) | |||||||||
| Net cash provided to (used in) discontinued operations | — | — | |||||||||
| Effect of exchange rate on cash, cash equivalents and restricted cash and cash equivalents | (18) | (22) | |||||||||
| Increase (decrease) in cash, cash equivalents and restricted cash and cash equivalents | (544) | 4,543 | |||||||||
| Cash, cash equivalents and restricted cash and cash equivalents at beginning of period | 6,436 | 1,925 | |||||||||
| Cash, cash equivalents and restricted cash and cash equivalents at end of period for continuing operations | $ | 5,892 | $ | 6,468 | |||||||
| Supplemental disclosure of cash flow information | |||||||||||
| Cash payments for interest, net of amounts capitalized | $ | 391 | $ | 278 | |||||||
| Cash payments for taxes, net of refunds | $ | 86 | $ | 344 | |||||||
| Change in construction payables | $ | (10) | $ | (26) | |||||||
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, 2022, 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.
Operations
Macao
From 2020 through the beginning of 2023, the Company’s operations in Macao were negatively impacted by the reduction in travel and tourism related to the COVID-19 pandemic. The Macao government's policy regarding the management of COVID-19 and general travel restrictions was relaxed in late December 2022 and early January 2023. Since then, visitation to the Company’s Macao Integrated Resorts and operations have improved.
The Macao government announced total visitation from mainland China to Macao increased approximately 118.3% and decreased approximately 50.1%, during the five months ended May 31, 2023 (the latest statistics currently available), as compared to the same period in 2022 and 2019 (pre-pandemic), respectively. The Macao government also announced gross gaming revenue increased approximately 205.1% and decreased approximately 46.4%, during the six months ended June 30, 2023, as compared to the same period in 2022 and 2019, respectively.
Singapore
From 2020 through early 2022, the Company’s operations in Singapore were negatively impacted by the reduction in travel and tourism related to the COVID-19 pandemic. However, the Vaccinated Travel Framework (“VTF”), launched in April 2022, facilitated the resumption of travel and had a positive impact on operations at Marina Bay Sands. During February 2023, any remaining COVID-19 border measures were lifted.
Visitation to Marina Bay Sands continues to improve since the travel restrictions have been lifted. The Singapore Tourism Board (“STB”) announced total visitation to Singapore increased from approximately 1.5 million in 2022 to 6.3 million for the six months ended June 30, 2023, while visitation decreased 32.6% when compared to the same period in 2019.
Summary
While the disruptions arising from the COVID-19 pandemic have subsided, given the dynamic nature of these circumstances, the potential future impact, if any, on the Company’s consolidated results of operations, cash flows and financial condition is uncertain. However, the Company has a strong balance sheet and sufficient liquidity in place, including total unrestricted cash and cash equivalents of $5.77 billion and access to $1.50 billion, $1.74 billion and $435 million of available borrowing capacity from the Company’s LVSC Revolving Facility, 2018 SCL Revolving Facility and 2012 Singapore Revolving Facility, respectively, as of June 30, 2023. The Company believes it is able to support continuing operations and complete the Company’s major construction projects that are underway.
Development Projects
New York
On June 2, 2023, the Company acquired the Nassau Coliseum from Nassau Live Center, LLC and related entities, which included the right to lease the underlying land from the County of Nassau in the State of New York
LAS VEGAS SANDS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
(the “Nassau Coliseum Transaction”). The Company purchased the Nassau Coliseum with the intent to obtain a casino license from the State of New York to develop and operate an Integrated Resort. There is no assurance the Company will be able to obtain such casino license.
Singapore
In April 2019, the Company’s wholly owned subsidiary, Marina Bay Sands Pte. Ltd. (“MBS”) and the STB entered into a development agreement (the “Second Development Agreement”) pursuant to which MBS has agreed to construct a development, which will include a hotel tower with luxury rooms and suites, a rooftop attraction, convention and meeting facilities and a state-of-the-art live entertainment arena with approximately 15,000 seats (the “MBS Expansion Project”). The Second Development Agreement provides for a total minimum project cost of approximately 4.50 billion Singapore dollars (“SGD,” approximately $3.32 billion at exchange rates in effect on June 30, 2023). The estimated cost and timing of the total project will be updated as the Company completes design and begins construction. The Company expects the total project cost will materially exceed the amounts referenced above from April 2019 based on current market conditions due to inflation, higher material and labor costs and other factors. The Company has incurred approximately $1.07 billion as of June 30, 2023, inclusive of the payment made in 2019 for the lease of the parcels of land underlying the MBS Expansion Project site. On March 22, 2023, MBS and the STB entered into a supplemental agreement, which further extended the construction commencement date to April 8, 2024 and the construction completion date to April 8, 2028, and allowed for changes to the construction and operation plans under the Second Development Agreement.
Recent Accounting Pronouncements
The Company’s management has evaluated the accounting standards that have been recently issued, but not yet effective, or those 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.
Note 2 — 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 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 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.
LAS VEGAS SANDS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
Accounts receivable consists of the following:
| June 30, 2023 | December 31, 2022 | ||||||||||
| (In millions) | |||||||||||
| Casino | $ | 442 | $ | 341 | |||||||
| Rooms | 26 | 34 | |||||||||
| Mall | 34 | 64 | |||||||||
| Other | 37 | 45 | |||||||||
| 539 | 484 | ||||||||||
| Less - provision for credit losses | (203) | (217) | |||||||||
| $ | 336 | $ | 267 |
The following table shows the movement in the provision for credit losses recognized for accounts receivable:
| 2023 | 2022 | ||||||||||
| (In millions) | |||||||||||
| Balance at January 1 | $ | 217 | $ | 232 | |||||||
| Provision for (recovery of) credit losses | (1) | 6 | |||||||||
| Write-offs | (11) | (24) | |||||||||
| Exchange rate impact | (2) | (3) | |||||||||
| Balance at June 30 | $ | 203 | $ | 211 |
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)** | |||||||||||||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||||||||||||||
| Balance at January 1 | $ | 81 | $ | 74 | $ | 72 | $ | 61 | $ | 614 | $ | 618 | |||||||||||||||||||||||
| Balance at June 30 | 137 | 68 | 66 | 63 | 654 | 574 | |||||||||||||||||||||||||||||
| Increase (decrease) | $ | 56 | $ | (6) | $ | (6) | $ | 2 | $ | 40 | $ | (44) |
(1)Of this amount, $154 million and $149 million as of June 30 and January 1, 2023, respectively, and $144 million and $145 million as of June 30 and January 1, 2022, related 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 3 — Goodwill and Intangible Assets, Net
Goodwill and intangible assets consist of the following:
| June 30, 2023 | December 31, 2022 | ||||||||||
| (In millions) | |||||||||||
| Finite-lived intangible assets: | |||||||||||
| Macao concession | $ | 495 | $ | — | |||||||
| Marina Bay Sands gaming license | 53 | 54 | |||||||||
| 548 | 54 | ||||||||||
| Less — accumulated amortization | (45) | (12) | |||||||||
| 503 | 42 | ||||||||||
| Indefinite-lived intangible assets | 18 | 12 | |||||||||
| Goodwill | 110 | 10 | |||||||||
| Total goodwill and intangible assets, net | $ | 631 | $ | 64 |
Macao Concession
On December 16, 2022, the Macao government announced the award of six definitive gaming concessions, one of which was awarded to Venetian Macau Limited (“VML,” a subsidiary of Sands China Ltd.), and on January 1, 2023, VML entered into a ten-year gaming concession contract with the Macao government (the “Concession”). Under the terms of the Concession, VML is required to pay the Macao government an annual gaming premium consisting of a fixed portion and a variable portion. The fixed portion of the premium is 30 million patacas (approximately $4 million at exchange rates in effect on June 30, 2023). The variable portion is 300,000 patacas per gaming table reserved exclusively for certain types of games or players, 150,000 patacas per gaming table not so reserved (the mass rate) and 1,000 patacas per electrical or mechanical gaming machine, including slot machines (approximately $37,158, $18,579 and $124, respectively, at exchange rates in effect on June 30, 2023).
On December 30, 2022, VML and certain other subsidiaries of the Company, confirmed and agreed to revert certain gaming equipment and gaming areas to the Macao government without compensation and free of any liens or charges in accordance with, and upon the expiry of, VML’s subconcession. On the same day, VML and the Macao government entered into a handover record (the “Handover Record”) granting VML the right to operate the reverted gaming equipment and gaming areas for the duration of the Concession in consideration for the payment of an annual fee. The annual fee is calculated based on a price per square meter of reverted gaming area, being 750 patacas per square meter in the first three years and 2,500 patacas per square meter in the subsequent seven years (approximately $93 and $310, respectively, at exchange rates in effect on June 30, 2023). The price per square meter used to determine the annual fee will be adjusted annually based on Macao’s average price index of the corresponding preceding year. The annual fee is estimated to be $13 million for the first three years and $42 million for the following seven years, subject to the aforementioned adjustment.
On January 1, 2023, the Company recognized an intangible asset and financial liability of 4.0 billion patacas (approximately $495 million at exchange rates in effect on June 30, 2023), representing the right to operate the gaming equipment and the gaming areas, the right to conduct games of chance in Macao and the unconditional obligation to make payments under the Concession. This intangible asset comprises the contractually obligated annual payments of fixed and variable premiums, as well as fees associated with the above-described Handover Record. The contractually obligated annual variable premium payments associated with the intangible asset was determined using the maximum number of table games at the mass rate and the maximum number of gaming machines that VML is currently allowed to operate by the Macao government. In the accompanying condensed consolidated balance sheet, the noncurrent portion of the financial liability is included in “Other long-term liabilities” and the current portion is included in “Other accrued liabilities.” The intangible asset is being amortized on a straight-line basis over the period of the Concession, being ten years.
LAS VEGAS SANDS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
Amortization expense for all intangible assets was $17 million and $4 million for the three months ended June 30, 2023 and 2022, respectively, and $34 million and $9 million for the six months ended June 30, 2023 and 2022, respectively. The estimated future amortization expense for all intangible assets is approximately $34 million for the six months ending December 31, 2023, and $67 million, $55 million, $50 million, $50 million for the years ending December 31, 2024, 2025, 2026 and 2027, respectively, and $248 million thereafter.
Nassau Coliseum
On June 2, 2023, the Company closed on its acquisition of the Nassau Coliseum, an entertainment arena in the State of New York. The Company paid an aggregate amount of $241 million, consisting of $221 million upon closing and a $20 million deposit made in 2022. The purchase of the Nassau Coliseum, which continues to operate following the closing of the sale, primarily included the fixed assets related to the arena and the right to lease the underlying land from the owner, the County of Nassau in the State of New York. This transaction resulted in the recognition of $100 million of goodwill. The Company purchased the Nassau Coliseum with the intent to obtain a casino license from the State of New York to develop and operate an Integrated Resort. There is no assurance the Company will be able to obtain such casino license.
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, 2023 | December 31, 2022 | ||||||||||
| (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 $4 and $5, respectively) | $ | 1,746 | $ | 1,745 | |||||||
| 2.900% Senior Notes due 2025 (net of unamortized original issue discount and deferred financing costs of $2) | 498 | 498 | |||||||||
| 3.500% Senior Notes due 2026 (net of unamortized original issue discount and deferred financing costs of $6 and $7, respectively) | 994 | 993 | |||||||||
| 3.900% Senior Notes due 2029 (net of unamortized original issue discount and deferred financing costs of $6) | 744 | 744 | |||||||||
| Other(2) | 201 | — | |||||||||
| Macao Related**(1)****:** | |||||||||||
| 5.125% Senior Notes due 2025 (net of unamortized original issue discount and deferred financing costs of $6 and $7, respectively) | 1,794 | 1,793 | |||||||||
| 3.800% Senior Notes due 2026 (net of unamortized original issue discount and deferred financing costs of $4 and $5, respectively) | 796 | 795 | |||||||||
| 2.300% Senior Notes due 2027 (net of unamortized original issue discount and deferred financing costs of $5 and $6, respectively) | 695 | 694 | |||||||||
| 5.400% Senior Notes due 2028 (net of unamortized original issue discount and deferred financing costs of $12 and $13, respectively) | 1,888 | 1,887 | |||||||||
| 2.850% Senior Notes due 2029 (net of unamortized original issue discount and deferred financing costs of $6) | 644 | 644 | |||||||||
| 4.375% Senior Notes due 2030 (net of unamortized original issue discount and deferred financing costs of $8) | 692 | 692 | |||||||||
| 3.250% Senior Notes due 2031 (net of unamortized original issue discount and deferred financing costs of $5) | 595 | 595 | |||||||||
| 2018 SCL Credit Facility — Revolving | 749 | 1,958 | |||||||||
| Other(2) | 19 | 22 | |||||||||
| Singapore Related**(1)****:** | |||||||||||
| 2012 Singapore Credit Facility — Term (net of unamortized deferred financing costs of $28 and $33, respectively) | 2,817 | 2,870 | |||||||||
| 2012 Singapore Credit Facility — Delayed Draw Term | 47 | 46 | |||||||||
| Other | 1 | 2 | |||||||||
| 14,920 | 15,978 | ||||||||||
| Less — current maturities | (71) | (2,031) | |||||||||
| Total long-term debt | $ | 14,849 | $ | 13,947 |
(1)Unamortized deferred financing costs of $44 million and $60 million as of June 30, 2023 and December 31, 2022, 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,” and “Prepaid expenses and other” in the accompanying condensed consolidated balance sheets.
(2)Includes finance leases related to the U.S. of $201 million as of June 30, 2023 and Macao of $18 million and $21 million as of June 30, 2023 and December 31, 2022, respectively.
LAS VEGAS SANDS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
LVSC Revolving Facility
As of June 30, 2023, the Company had $1.50 billion of available borrowing capacity under the LVSC Revolving Facility, net of outstanding letters of credit.
On January 30, 2023, LVSC entered into Amendment No. 4 (the “Fourth Amendment”) with lenders to the LVSC Revolving Credit Agreement. Pursuant to the Fourth Amendment, the existing LVSC Revolving Credit Agreement was amended to (a) determine consolidated adjusted EBITDA on a year-to-date annualized basis during the period commencing on the effective date and ending on and including December 31, 2023, as follows: (i) for the fiscal quarter ending March 31, 2023, consolidated adjusted EBITDA for such fiscal quarter multiplied by four, (ii) for the fiscal quarter ending June 30, 2023, consolidated adjusted EBITDA for such fiscal quarter and the immediately preceding fiscal quarter multiplied by two, and (iii) for the fiscal quarter ending September 30, 2023, consolidated adjusted EBITDA for such fiscal quarter and the two immediately preceding fiscal quarters, multiplied by four-thirds; (b) extend the period during which LVSC is required to maintain a specified amount of minimum liquidity as of the last day of each month to December 31, 2023; and (c) extend the period during which LVSC is unable to declare or pay any dividend or other distribution, unless liquidity is greater than $1.0 billion on a pro forma basis after giving effect to such dividend or distribution, to December 31, 2023.
On June 30, 2023, LVSC entered into Amendment No. 5 (the “Fifth Amendment”) with lenders to the LVSC Revolving Credit Agreement. Pursuant to the Fifth Amendment, the existing LVSC Revolving Credit Agreement was amended to update the terms therein and provide for the adoption of the Secured Overnight Financing Rate (“SOFR”) as the benchmark interest rate.
2018 SCL Credit Facility
On May 11, 2023, Sands China Ltd. (“SCL,” a majority-owned subsidiary of the Company) entered into an amended and restated facility agreement (the “A&R Facility Agreement”) with respect to certain provisions of the 2018 SCL Credit Facility, pursuant to which lenders have (a) extended the termination date for the Hong Kong Dollar (“HKD”) commitments and U.S. dollar commitments of the lenders that consented to the waivers and amendments in the A&R Facility Agreement (the “Extending Lenders”) from July 31, 2023 to July 31, 2025; (b) extended to (and including) January 1, 2024, the waiver period for the requirement for SCL to comply with the requirements that SCL ensure (i) the consolidated leverage ratio does not exceed 4.0x and (ii) the consolidated interest coverage ratio is not less than 2.5x; (c) amended the definition of consolidated total debt such that it excludes any financial indebtedness that is subordinated and subject in right of payment to the prior payment in full of the A&R Facility Agreement (including the $1.0 billion subordinated unsecured term loan facility made available by the Company to SCL); (d) amended the maximum permitted consolidated leverage ratio as of the last day of each of the financial quarters ending March 31, 2024, June 30, 2024, September 30, 2024, December 31, 2024, and subsequent financial quarters to be 6.25x, 5.5x, 5.0x, 4.5x, and 4.0x, respectively; and (e) extended to (and including) January 1, 2025, the period during which SCL’s ability to declare or make any dividend payment or similar distribution is restricted if at such time (x) the Total Commitments (as defined in the A&R Facility Agreement) exceed $2.0 billion by SCL’s exercise of the option to increase the Total Commitments by an aggregate amount of up to $1.0 billion and (y) the consolidated leverage ratio is greater than 4.0x, unless, after giving effect to such payment, the sum of (i) the aggregate amount of cash and cash equivalents of SCL on such date and (ii) the aggregate amount of the undrawn facility under the A&R Facility Agreement and unused commitments under other credit facilities of SCL is greater than $2.0 billion. The amendments shall take effect with respect to the Extended Commitments on July 31, 2023. Pursuant to the A&R Facility Agreement, SCL will pay a customary fee to the Extending Lenders that consented.
The Extending Lenders’ HKD commitments total HKD 17.63 billion (approximately $2.25 billion at exchange rates in effect on May 11, 2023) and U.S. dollar commitments total $237 million, which together represent 100% of the total available commitments under the A&R Facility Agreement.
As of June 30, 2023, SCL had $1.74 billion of available borrowing capacity under the 2018 SCL Revolving Facility comprised of HKD commitments of HKD 12.32 billion (approximately $1.57 billion at exchange rates in effect on June 30, 2023) and U.S. dollar commitments of $166 million.
LAS VEGAS SANDS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
2012 Singapore Credit Facility
As of June 30, 2023, MBS had SGD 590 million (approximately $435 million at exchange rates in effect on June 30, 2023) 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 $113 million at exchange rates in effect on June 30, 2023) pursuant to a development agreement.
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 due to various 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, 2023, there is SGD 3.69 billion (approximately $2.72 billion at exchange rates in effect on June 30, 2023) 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.
Debt Covenant Compliance
As of June 30, 2023, management believes the Company was in compliance with all debt covenants. The Company amended its 2018 SCL Credit Facility to, among other things, waive SCL’s requirement to comply with financial covenants through July 31, 2023, which will be extended to January 1, 2024, effective from July 31, 2023, which include a maximum leverage ratio of total debt to trailing twelve-months adjusted earnings before interest, income taxes, depreciation and amortization, calculated in accordance with the A&R Facility Agreement.
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, | |||||||||||
| 2023 | 2022 | ||||||||||
| (In millions) | |||||||||||
| Proceeds from 2018 SCL Credit Facility | $ | — | $ | 700 | |||||||
| $ | — | $ | 700 | ||||||||
| Repayments on 2018 SCL Credit Facility | $ | (1,198) | $ | — | |||||||
| Repayments on 2012 Singapore Credit Facility | (31) | (30) | |||||||||
| Repayments on Other Long-Term Debt | (58) | (5) | |||||||||
| $ | (1,287) | $ | (35) |
Fair Value of Long-Term Debt
The estimated fair value of the Company’s long-term debt as of June 30, 2023 and December 31, 2022, was approximately $13.92 billion and $15.14 billion, respectively, compared to its contractual value of $14.79 billion and $16.06 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).
LAS VEGAS SANDS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
Note 5 — Equity and Earnings (Loss) Per Share
Common Stock
Dividends
In July 2023, the Company’s Board of Directors declared a quarterly dividend of $0.20 per common share (a total estimated to be approximately $153 million) to be paid on August 16, 2023, to stockholders of record on August 8, 2023.
Earnings 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, | ||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
| (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 | 3 | — | 3 | — | |||||||||||||||||||
| Weighted-average common and common equivalent shares (used in the calculation of diluted earnings (loss) per share) | 767 | 764 | 767 | 764 | |||||||||||||||||||
| Antidilutive stock options excluded from the calculation of diluted earnings (loss) per share | 2 | 15 | 3 | 15 |
Note 6 — Income Taxes
The Company’s effective income tax rate from continuing operations was 16.2% for the six months ended June 30, 2023, compared to 14.4% for the six months ended June 30, 2022. The effective income tax rate for the six months ended June 30, 2023 reflects a 17% statutory tax rate on the Company’s Singapore operations, a 21% corporate income tax rate on its domestic operations, and a zero percent tax rate on its Macao gaming 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 their peers received a corporate income tax exemption on gaming operations through December 31, 2022. In December 2022, the Company requested a corporate tax exemption on profits generated by the operation of casino games in Macao for the new gaming concession period effective from January 1, 2023 through December 31, 2032, or for a period of corporate tax exemption that the Chief Executive of Macao may deem more appropriate. There is no assurance the corporate tax exemption will be granted.
In accordance with interim accounting guidance, the Company calculated an estimated annual effective tax rate 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.
Note 7 — Leases
Lessee
The Company has operating and finance leases for various real estate (including leasehold interests in land) and equipment. Certain of these lease agreements include rental payments adjusted periodically for inflation, rental payments based on usage and rental payments contingent on certain events occurring (e.g., the Nassau Land Lease rental payments will increase in the event the Company is awarded a gaming license in New York). Certain of the
LAS VEGAS SANDS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
Company’s leases include options to extend the lease term by one month to 10 years. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
Nassau Coliseum
In conjunction with the Nassau Coliseum Transaction, the Company entered into a lease agreement with the County of Nassau in the State of New York, for the use and exclusive right to develop and operate assets on approximately 72 acres of land, including the Nassau Coliseum and other improvements thereon (the “Nassau Land Lease”), which commenced on June 2, 2023 and has a 99-year lease term. The Company is required to make annual rent payments in the amounts and at the times specified in the Nassau Land Lease agreement, including additional rent payments contingent on certain events occurring as defined in the agreement. As of June 30, 2023, the related right-of-use (“ROU”) asset and finance lease liability were $279 million and $201 million, respectively. Refer to “Note 3 — Goodwill and Intangible Assets, Net” for further details on this transaction.
In the accompanying condensed consolidated balance sheet, the Nassau Land Lease ROU asset is included in “Property and equipment, net” and the noncurrent portion of the related finance lease liability is included in “Long-term debt.” A one-time rent payment of $54 million was made under the finance lease liability within two business days of the lease term commencement date and is included in cash flows used in financing activities.
The future minimum lease payments are $3 million for the period ending December 31, 2023, $6 million for each of the years ending December 31, 2024 through 2027, and $1.77 billion thereafter.
Lessor
Lease revenue for the Company’s mall operations consists of the following:
| Three Months Ended June 30, | |||||||||||||||||||||||
| 2023 | 2022 | ||||||||||||||||||||||
| Mall | Other | Mall | Other | ||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||
| Minimum rents | $ | 123 | $ | 1 | $ | 126 | $ | 1 | |||||||||||||||
| Overage rents | 25 | — | 12 | — | |||||||||||||||||||
| Rent concessions(1) | — | — | (12) | — | |||||||||||||||||||
| Total overage rents and rent concessions | 25 | — | — | — | |||||||||||||||||||
| $ | 148 | $ | 1 | $ | 126 | $ | 1 | ||||||||||||||||
| Six Months Ended June 30, | |||||||||||||||||||||||
| 2023 | 2022 | ||||||||||||||||||||||
| Mall | Other | Mall | Other | ||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||
| Minimum rents | $ | 244 | $ | 1 | $ | 250 | $ | 1 | |||||||||||||||
| Overage rents | 43 | — | 26 | — | |||||||||||||||||||
| Rent concessions(1) | — | — | (24) | — | |||||||||||||||||||
| Total overage rents and rent concessions | 43 | — | 2 | — | |||||||||||||||||||
| $ | 287 | $ | 1 | $ | 252 | $ | 1 |
(1)Rent concessions were provided to tenants as a result of the COVID-19 pandemic and the impact on mall operations.
LAS VEGAS SANDS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
Note 8 — 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.
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 $372 million at exchange rates in effect on June 30, 2023). 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 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. 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. At the end of December 2016, all the appeals were transferred to the Macao Second Instance Court.
Evidence gathering by the Macao Judicial Court commenced by letters rogatory, which was completed on March 14, 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 $11.95 billion at exchange rates in effect on June 30, 2023), allegedly representing lost profits from 2004 to 2018, and reserving its right to claim for lost profits up to 2022. On September 4, 2019, the Macao Judicial Court allowed AAEC’s amended request. The U.S. Defendants appealed the decision allowing the amended claim on September 17, 2019; the Macao Judicial Court accepted the appeal on September 26, 2019, and that appeal is currently pending.
On April 16, 2021, the U.S. Defendants moved to reschedule the trial because of the ongoing COVID-19 pandemic. The Macao Judicial Court denied the U.S. Defendants’ motion on May 28, 2021. The LVSC entities appealed that ruling on June 16, 2021, and that appeal is currently pending.
The trial began on June 16, 2021. By order dated June 17, 2021, the Macao Judicial Court scheduled additional trial dates in late 2021 to hear witnesses who were subject to COVID-19 travel restrictions that prevented or severely limited their ability to enter Macao. The U.S. Defendants appealed certain aspects of the Macao Judicial Court’s June 17, 2021 order, and that appeal is currently pending.
LAS VEGAS SANDS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
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, 2023) based on Plaintiff’s July 15, 2019 amendment. By motion dated July 20, 2021, the U.S. Defendants moved for an order withdrawing that invoice. 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.
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 $7.17 billion and $7.72 billion, respectively, at exchange rates in effect on June 30, 2023). 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. That appeal is fully briefed and remains pending with the Macao Second Instance Court.
On September 19, 2022, the U.S. Defendants were notified of an invoice for appeal court fees totaling 48 million patacas (approximately $6 million at exchange rates in effect on June 30, 2023). By motion dated September 29, 2022, the U.S. Defendants moved the Macao Judicial Court for an order withdrawing that invoice. The Macao Judicial Court denied that motion by order dated October 24, 2022. The U.S. Defendants appealed that order on November 10, 2022 and on January 6, 2023, submitted the appeal brief, and that appeal remains 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 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 to 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 amended complaint, which Lead Plaintiffs opposed on June 17, 2022. Briefing was completed on July 8, 2022, and the motion is pending before the U.S. District Court.
LAS VEGAS SANDS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
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.
Commitments
Macao Concession - Committed Investment
Under the Concession, the Company is required to invest a minimum of 30.24 billion patacas (approximately $3.75 billion at exchange rates in effect on June 30, 2023), in certain gaming and non-gaming projects in Macao by December 2032. The specific investments to be carried out are determined annually by VML and proposed to the Macao government for approval. VML submitted the list of investments and projects it intends to carry out in 2023 to the Macao government on March 31, 2023, which has been approved by the Macao government.
Note 9 — 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 also reviews construction and development activities for its primary projects under development, in addition to its reportable segments noted above, which include the renovation and expansion of the Company’s MICE, entertainment and retail product in Macao and the MBS Expansion Project. 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 through February 22, 2022, and the information below for the six months ended June 30, 2022, 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, 2023 and December 31, 2022, and for the three and six months ended June 30, 2023 and 2022 is as follows:
| Casino | Rooms | Food and Beverage | Mall | Convention, Retail and Other | Net Revenues | ||||||||||||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||||||||||||||
| Three Months Ended June 30, 2023 | |||||||||||||||||||||||||||||||||||
| Macao: | |||||||||||||||||||||||||||||||||||
| The Venetian Macao | $ | 523 | $ | 48 | $ | 17 | $ | 53 | $ | 12 | $ | 653 | |||||||||||||||||||||||
| The Londoner Macao | 281 | 80 | 20 | 16 | 5 | 402 | |||||||||||||||||||||||||||||
| The Parisian Macao | 183 | 35 | 11 | 8 | 2 | 239 | |||||||||||||||||||||||||||||
| The Plaza Macao and Four Seasons Macao | 150 | 25 | 8 | 39 | 1 | 223 | |||||||||||||||||||||||||||||
| Sands Macao | 76 | 4 | 3 | — | 1 | 84 | |||||||||||||||||||||||||||||
| Ferry Operations and Other | — | — | — | — | 27 | 27 | |||||||||||||||||||||||||||||
| 1,213 | 192 | 59 | 116 | 48 | 1,628 | ||||||||||||||||||||||||||||||
| Marina Bay Sands | 649 | 104 | 84 | 57 | 31 | 925 | |||||||||||||||||||||||||||||
| Intercompany royalties | — | — | — | — | 55 | 55 | |||||||||||||||||||||||||||||
| Intercompany eliminations(1) | — | — | — | (1) | (65) | (66) | |||||||||||||||||||||||||||||
| Total net revenues | $ | 1,862 | $ | 296 | $ | 143 | $ | 172 | $ | 69 | $ | 2,542 | |||||||||||||||||||||||
| 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 | |||||||||||||||||||||||
| Six Months Ended June 30, 2023 | |||||||||||||||||||||||||||||||||||
| Macao: | |||||||||||||||||||||||||||||||||||
| The Venetian Macao | $ | 969 | $ | 87 | $ | 30 | $ | 104 | $ | 21 | $ | 1,211 | |||||||||||||||||||||||
| The Londoner Macao | 479 | 135 | 34 | 30 | 7 | 685 | |||||||||||||||||||||||||||||
| The Parisian Macao | 311 | 63 | 20 | 16 | 3 | 413 | |||||||||||||||||||||||||||||
| The Plaza Macao and Four Seasons Macao | 259 | 45 | 14 | 75 | 2 | 395 | |||||||||||||||||||||||||||||
| Sands Macao | 143 | 8 | 6 | — | 1 | 158 | |||||||||||||||||||||||||||||
| Ferry Operations and Other | — | — | — | — | 45 | 45 | |||||||||||||||||||||||||||||
| 2,161 | 338 | 104 | 225 | 79 | 2,907 | ||||||||||||||||||||||||||||||
| Marina Bay Sands | 1,242 | 201 | 163 | 110 | 57 | 1,773 | |||||||||||||||||||||||||||||
| Intercompany royalties | — | — | — | — | 103 | 103 | |||||||||||||||||||||||||||||
| Intercompany eliminations(1) | — | — | — | (1) | (120) | (121) | |||||||||||||||||||||||||||||
| Total net revenues | $ | 3,403 | $ | 539 | $ | 267 | $ | 334 | $ | 119 | $ | 4,662 |
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 |
(1)Intercompany eliminations include royalties and other intercompany services.
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||
| Intersegment Revenues | |||||||||||||||||||||||
| Macao: | |||||||||||||||||||||||
| The Venetian Macao | $ | 2 | $ | 1 | $ | 4 | $ | 3 | |||||||||||||||
| Ferry Operations and Other | 7 | 6 | 12 | 11 | |||||||||||||||||||
| 9 | 7 | 16 | 14 | ||||||||||||||||||||
| Marina Bay Sands | 2 | 1 | 2 | 1 | |||||||||||||||||||
| Intercompany royalties | 55 | 28 | 103 | 50 | |||||||||||||||||||
| Total intersegment revenues | $ | 66 | $ | 36 | $ | 121 | $ | 65 |
LAS VEGAS SANDS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
| Three Months Ended June 30, | Six Months Ended June 30, | ||||||||||||||||||||||
| 2023 | 2022 | 2023 | 2022 | ||||||||||||||||||||
| (In millions) | |||||||||||||||||||||||
| Adjusted Property EBITDA | |||||||||||||||||||||||
| Macao: | |||||||||||||||||||||||
| The Venetian Macao | $ | 252 | $ | (21) | $ | 462 | $ | (2) | |||||||||||||||
| The Londoner Macao | 103 | (54) | 159 | (87) | |||||||||||||||||||
| The Parisian Macao | 74 | (29) | 120 | (40) | |||||||||||||||||||
| The Plaza Macao and Four Seasons Macao | 91 | 17 | 166 | 49 | |||||||||||||||||||
| Sands Macao | 15 | (22) | 25 | (39) | |||||||||||||||||||
| Ferry Operations and Other | 6 | (1) | 7 | (2) | |||||||||||||||||||
| 541 | (110) | 939 | (121) | ||||||||||||||||||||
| Marina Bay Sands | 432 | 319 | 826 | 440 | |||||||||||||||||||
| Consolidated adjusted property EBITDA(1) | 973 | 209 | 1,765 | 319 | |||||||||||||||||||
| Other Operating Costs and Expenses | |||||||||||||||||||||||
| Stock-based compensation(2) | (8) | (6) | (19) | (11) | |||||||||||||||||||
| Corporate | (60) | (55) | (117) | (114) | |||||||||||||||||||
| Pre-opening | (8) | (3) | (10) | (7) | |||||||||||||||||||
| Development | (54) | (22) | (96) | (82) | |||||||||||||||||||
| Depreciation and amortization | (288) | (256) | (562) | (520) | |||||||||||||||||||
| Amortization of leasehold interests in land | (14) | (14) | (28) | (28) | |||||||||||||||||||
| Loss on disposal or impairment of assets | (4) | — | (18) | (6) | |||||||||||||||||||
| Operating income (loss) | 537 | (147) | 915 | (449) | |||||||||||||||||||
| Other Non-Operating Costs and Expenses | |||||||||||||||||||||||
| Interest income | 76 | 14 | 146 | 18 | |||||||||||||||||||
| Interest expense, net of amounts capitalized | (210) | (162) | (428) | (318) | |||||||||||||||||||
| Other income (expense) | 14 | (9) | (21) | (31) | |||||||||||||||||||
| Income tax expense | (49) | (110) | (99) | (112) | |||||||||||||||||||
| Net income (loss) from continuing operations | $ | 368 | $ | (414) | $ | 513 | $ | (892) |
(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.
LAS VEGAS SANDS CORP. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
(UNAUDITED)
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.
(2)During the three months ended June 30, 2023 and 2022, the Company recorded stock-based compensation expense of $20 million and $15 million, respectively, of which $12 million and $9 million, respectively, was included in corporate expense in the accompanying condensed consolidated statements of operations. During the six months ended June 30, 2023 and 2022, the Company recorded stock-based compensation expense of $42 million and $29 million, respectively, of which $23 million and $18 million, respectively, was included in corporate expense in the accompanying condensed consolidated statements of operations.
| Six Months Ended June 30, | |||||||||||
| 2023 | 2022 | ||||||||||
| (In millions) | |||||||||||
| Capital Expenditures | |||||||||||
| Corporate and Other | $ | 23 | $ | 37 | |||||||
| Macao: | |||||||||||
| The Venetian Macao | 28 | 25 | |||||||||
| The Londoner Macao | 45 | 118 | |||||||||
| The Parisian Macao | 1 | 1 | |||||||||
| The Plaza Macao and Four Seasons Macao | 4 | 5 | |||||||||
| Sands Macao | 2 | 2 | |||||||||
| 80 | 151 | ||||||||||
| Marina Bay Sands | 259 | 147 | |||||||||
| Total capital expenditures | $ | 362 | $ | 335 |
| June 30, 2023 | December 31, 2022 | ||||||||||
| (In millions) | |||||||||||
| Total Assets | |||||||||||
| Corporate and Other | $ | 5,989 | $ | 5,422 | |||||||
| Macao: | |||||||||||
| The Venetian Macao | 2,206 | 2,135 | |||||||||
| The Londoner Macao | 4,434 | 4,489 | |||||||||
| The Parisian Macao | 1,867 | 1,828 | |||||||||
| The Plaza Macao and Four Seasons Macao | 1,037 | 1,020 | |||||||||
| Sands Macao | 277 | 208 | |||||||||
| Ferry Operations and Other | 412 | 870 | |||||||||
| 10,233 | 10,550 | ||||||||||
| Marina Bay Sands | 6,048 | 6,067 | |||||||||
| Total assets | $ | 22,270 | $ | 22,039 |
LAS VEGAS SANDS CORP. AND SUBSIDIARIES
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