Skip to content
AnalystLens

Las Vegas Sands Annual Report, Year Ended Dec 31, 2007

Filing Date
Filed February 29, 2008
Period End
December 31, 2007
Security
LVS
In the record · 2016–202610-K1110-Q338-K174

LVS filed 11 annual reports (10-K), 33 quarterly reports (10-Q) and 174 current reports (8-K) between 2016 and 2026.

  1. Material agreement8-K · Mar ’17Mar ’17
  2. Leadership change8-K · Jun ’19Jun ’19
  3. Leadership change8-K · Jul ’21Jul ’21
  4. Material agreement8-K · May ’25May ’25

01—Abstract

Summary

Summary of the 10-K filed February 29, 2008. Cited figures are marked; the original filing is the authoritative source.

Las Vegas Sands Corp. (NYSE: LVS) reported 2007 net revenues of $2.95 billiona, up from $2.24 billion in 2006, driven primarily by the opening of The Venetian Macao in August 2007.

Operating income fell to $330.0 millionb from $574.1 million, as operating expenses rose to $2.62 billion, reflecting higher Macao gaming taxes, pre-opening costs ($189.3 million) and depreciation. Net income declined to $116.7 million, or $0.33 per diluted share, from $442.0 million, or $1.24 per diluted share, in 2006. The company has not paid dividends since its 2004 formation.

The balance sheet expanded sharply to $11.47 billionc in total assets, with long-term debt of $7.52 billion as of December 31, 2007, up from $4.14 billion a year earlier, as the company funded large development projects. Capital expenditures totaled $3.79 billion in 2007. Cash and cash equivalents were $857.2 million at year-end, and the company reported a working capital deficit of $114.2 million.

Management states it will need additional debt and/or equity financing for the remaining Cotai Strip developments, estimated at about $12.0 billiond in total cost, of which $2.91 billion had been capitalized by year-end. Key growth drivers include The Palazzo (partially opened December 30, 2007), Marina Bay Sands in Singapore (expected to cost in excess of $4.0 billion and open in late 2009), and Sands Bethworks in Pennsylvania. The company remains heavily concentrated in Las Vegas and Macao, with Mr. Sheldon G.

Adelson and related parties owning approximately 69% of common stock. Risk factors highlighted by the filing include dependence on Macao land concessions, the Macao subconcession expiring in 2022, the Macao corporate income tax exemption expiring at the end of 2008, and ongoing litigation.

02—Key points

Key Highlights

  1. Net revenues rose 31.9% to $2.95 billion in 2007, primarily due to The Venetian Macao opening on August 28, 2007.
  2. Operating income declined to $330.0 million from $574.1 million, and net income fell to $116.7 million ($0.33 per diluted share) from $442.0 million ($1.24 per diluted share).
  3. Total assets grew to $11.47 billion and long-term debt increased to $7.52 billion from $4.14 billion, reflecting heavy development spending.
  4. Capital expenditures were $3.79 billion in 2007, including $1.96 billion for Macao construction and $1.18 billion for The Palazzo and The Shoppes at The Palazzo.
  5. Effective tax rate was 15.6%, largely due to a zero effective tax rate on Macao gaming income under an exemption expiring at the end of 2008.
  6. The company has not paid dividends since its 2004 formation and does not expect to pay dividends in the future.
  7. Cotai Strip developments are estimated at about $12.0 billion, with $2.91 billion capitalized as of December 31, 2007, and additional financing still required.

03—Questions

Frequently Asked Questions

  1. Why did net income drop sharply in 2007 despite higher revenue?

    Operating expenses rose 57.6% to $2.62 billion, outpacing revenue growth. Casino expenses increased $510.6 million, of which $322.1 million related to the 39.0% gross win tax on higher Macao casino revenue. Pre-opening expense rose to $189.3 million and depreciation and amortization increased $91.8 million, mainly from The Venetian Macao. Interest expense, net, also rose to $172.3 million from $69.7 million.

  2. How is the company funding its large development projects?

    The company borrowed heavily in 2007, including a $5.0 billion U.S. senior secured credit facility, a Macao credit facility increased to $3.3 billion, and a SGD 5.44 billion (approximately $3.76 billion) Singapore credit facility that closed in January 2008. Management states it will need additional debt and/or equity financing in the near term for the remaining Cotai Strip developments and expects to complete that refinancing in 2008.

  3. What are the main risks to the Macao business?

    The Macao subconcession expires on June 26, 2022, and the Macao government may redeem it beginning December 26, 2017. The company also depends on land concessions for parcels 5, 6, 7 and 8, with $623.0 million in capitalized construction costs at risk if concessions are not obtained. The corporate income tax exemption expires at the end of 2008, and the Macao gaming tax does not allow deduction of credit losses.

  4. Who controls the company?

    Sheldon G. Adelson and trusts for the benefit of him and his family members beneficially own approximately 69% of outstanding common stock as of December 31, 2007. As a result, the company is considered a controlled company under NYSE listing standards, and certain NYSE corporate governance requirements do not apply.

  5. What are the expected openings and costs of major projects?

    The Palazzo partially opened on December 30, 2007, and The Venetian Macao opened on August 28, 2007. The Four Seasons Macao is expected to open in summer 2008, while Marina Bay Sands in Singapore and the Las Vegas condominium tower are expected to open in late 2009. Sands Bethworks is expected to open in summer 2009. The Marina Bay Sands cost is estimated to exceed $4.0 billion, and the Las Vegas condominiums and Sands Bethworks are each estimated at approximately $600.0 million.

04—Continue

← View all 10-K filings