01—Abstract
Summary
Summary of the 10-K filed March 1, 2010. Cited figures are marked; the original filing is the authoritative source.
Las Vegas Sands Corp. (NYSE: LVS) reported a 2009 net loss attributable to Las Vegas Sands Corp. of $354.5 milliona, compared with a net loss of $163.6 million in 2008.
Net revenues rose 3.9% to $4.56 billionb, but operating results swung to an operating loss of $28.7 million, driven by a $169.5 million impairment loss, a $42.5 million legal settlement, and a $96.9 million valuation allowance against U.S. deferred tax assets. Macau remained the key profit engine: The Venetian Macao, Sands Macao and Four Seasons Macao generated adjusted property EBITDAR of $556.5 million, $244.9 million and $40.5 million, respectively, while Las Vegas Operating Properties fell to $259.2 million from $392.1 million. Sands Bethlehem opened in May 2009 and contributed $17.6 million of adjusted property EBITDAR.
The company is highly leveraged, with $11.03 billionc of long-term debt outstanding at December 31, 2009, and cash and equivalents of $4.96 billion. Management suspended portions of its development program, including the St. Regis Residences and parts of the Cotai Strip, and the company said it will need additional financing to fund the balance of its Cotai Strip developments. The November 2009 SCL Offering of Sands China Ltd. raised gross proceeds of $2.5 billion across the offering and related transactions, leaving the company with a 70.3% interest in SCL.
Marina Bay Sands in Singapore is expected to open on April 27, 2010. The filing highlights concentration risk: the company depends on Las Vegas and Macau for substantially all of its cash flow until Marina Bay Sands opens, and Sheldon G.
Adelson and related parties control approximately 52% of common stock. Key contingencies include a $58.6 milliond judgment in the Suen litigation, which the company is appealing and has not reserved for, and the need to extend a Macau land concession deadline for parcel 3, which now runs to April 2013.
02—Key points
Key Highlights
- Net revenues increased 3.9% to $4.56 billion in 2009, but the company posted an operating loss of $28.7 million versus operating income of $163.7 million in 2008.
- Net loss attributable to Las Vegas Sands Corp. widened to $354.5 million in 2009 from $163.6 million in 2008, after a $169.5 million impairment loss, a $42.5 million legal settlement and a $96.9 million U.S. deferred tax valuation allowance.
- Macau properties drove earnings: The Venetian Macao adjusted property EBITDAR was $556.5 million (up 11.5%), Sands Macao $244.9 million (up 14.1%), and Four Seasons Macao $40.5 million.
- Las Vegas Operating Properties adjusted property EBITDAR fell 33.9% to $259.2 million, reflecting lower room revenues and reduced room rates.
- Total long-term debt was $11.03 billion at December 31, 2009, with cash and cash equivalents of $4.96 billion; the Macau and U.S. credit facilities carry leverage covenants of 4.5x and 6.5x respectively for the December 31, 2009 quarter.
- Sands China Ltd.'s November 2009 IPO on the Hong Kong exchange gave the company 70.3% ownership of SCL, and Marina Bay Sands in Singapore is expected to open on April 27, 2010.
- Several development projects were suspended, including the St. Regis Residences and Sands Bethlehem's hotel and retail components, and the company will need additional financing to complete its remaining Cotai Strip projects.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2009filed March 1, 2010Financial Statements
FY2009 against FY2008
| Line item | FY2009FY2008 | Change |
|---|---|---|
| Revenue | $4.56B$4.39B | +3.9% |
| R&D Expenses | $533K$12.79M | −95.8% |
| SG&A Expenses | $526.20M$550.53M | −4.4% |
| Operating Expenses | $4.59B$4.23B | +8.6% |
| Operating Income | -$28.74M$163.66M | −117.6% |
| Interest Expense | $321.87M$421.82M | −23.7% |
| Net Income | -$354.48M-$163.56M | −116.7% |
| EPS (Basic) | $-0.82$-0.48 | −70.8% |
| EPS (Diluted) | $-0.82$-0.48 | −70.8% |
| Shares Outstanding (Basic) | 656.84M392.13M | +67.5% |
| Shares Outstanding (Diluted) | 656.84M392.13M | +67.5% |
05—Questions
Frequently Asked Questions
Why did Las Vegas Sands report an operating loss in 2009 despite higher revenues?
Operating expenses rose 8.6% to $4.59 billion, outpacing a 3.9% increase in net revenues. The filing attributes the increase mainly to a full year of Four Seasons Macao, the opening of Sands Bethlehem, a $169.5 million impairment loss, a $42.5 million legal settlement in corporate expense, and higher provisions for doubtful accounts and depreciation.
How much debt does the company carry and how does it plan to fund development?
Long-term debt totaled $11.03 billion at December 31, 2009. The company said its projects will be funded with existing cash, operating cash flows and available borrowings, except for suspended projects, and that it will need to arrange additional financing for the balance of its Cotai Strip developments, with no assurance it can obtain it.
What is the status of Marina Bay Sands and Sands Bethlehem?
Marina Bay Sands is expected to open on April 27, 2010, with the company having capitalized SGD 5.63 billion (about $4.01 billion) in costs. Sands Bethlehem's casino opened May 22, 2009, while its hotel, retail and event center components have been suspended temporarily pending improved capital markets.
What are the main legal and regulatory risks flagged in the filing?
The filing notes a $58.6 million judgment in the Suen matter, which the company is appealing and has not reserved for. It also flags the April 2013 deadline to complete parcel 3 in Macau, the June 2022 expiration of the Macau subconcession, and the 2010 renegotiation of Starwood and Shangri-La management agreements tied to parcels 5 and 6.
Who controls the company?
Sheldon G. Adelson, his family members and trusts for their benefit beneficially own approximately 52% of outstanding common stock as of December 31, 2009, excluding unexercised warrants for 87.5 million shares. The company is therefore a controlled company under NYSE rules.
06—Continue