01—Abstract
Summary
Summary of the 10-K filed February 26, 2016. Cited figures are marked; the original filing is the authoritative source.
Las Vegas Sands Corp. reported net revenues of $11.69 billiona for 2015, a decrease of $2.90 billion (19.9%) from $14.58 billion in 2014, driven primarily by a $2.72 billion decline at its Macao operating properties and a $261.8 million decline at Marina Bay Sands, mainly from lower casino revenues.
Operating income fell to $2.84 billionb from $4.10 billion, and net income attributable to Las Vegas Sands Corp. decreased to $1.97 billion, or $2.47 per diluted share, from $2.84 billion, or $3.52 per diluted share. Total adjusted property EBITDA was $4.17 billion versus $5.42 billion, with Macao down 31.9% and Marina Bay Sands down 12.6%. Cash generated from operating activities was $3.45 billion, down from $4.83 billion, and cash and cash equivalents ended the year at $2.18 billion.
The company paid $2.69 billionc in dividends during 2015 and declared a quarterly dividend of $0.72 per share for the first quarter of 2016. Long-term debt stood at $9.37 billion at year-end, with $1.36 billion, $2.25 billion and $5.09 billion maturing in 2018, 2019 and 2020, respectively. Capital expenditures totaled $1.53 billion, mostly for The Parisian Macao, which is anticipated to open in the second half of 2016 subject to Macao government approval.
Key risks flagged in the filing include the Macao subconcession expiring in June 2022 with a government redemption right beginning December 2017, land concession deadlines in November and December 2016 for The Parisian Macao and Sands Cotai Central, and substantial pending litigation, including the Roundsquare and Jacobs matters. Net assets in the U.S. subject to the credit facility restrictions and a $3.11 billiond valuation allowance on U.S. deferred tax assets are also noted.
02—Key points
Key Highlights
- Net revenues fell 19.9% to $11.69 billion in 2015 from $14.58 billion in 2014, mainly on lower casino revenues in Macao and at Marina Bay Sands.
- Operating income declined to $2.84 billion from $4.10 billion, and operating margin, as the filing presents it, moved from 28.1% to 24.3% of net revenues.
- Net income attributable to Las Vegas Sands Corp. was $1.97 billion, or $2.47 per diluted share, versus $2.84 billion, or $3.52 per diluted share, in 2014.
- Total adjusted property EBITDA decreased 23.1% to $4.17 billion, with Macao adjusted property EBITDA down 31.9% and Marina Bay Sands down 12.6%.
- Net cash from operating activities was $3.45 billion, down from $4.83 billion; year-end unrestricted cash was $2.18 billion.
- Long-term debt totaled $9.37 billion, and the company paid $2.69 billion in dividends during 2015 while declaring a $0.72 quarterly dividend for 2016.
- Macao subconcession expires June 26, 2022, and the Parisian Macao and Sands Cotai Central land concessions require completion by November and December 2016, with $1.65 billion and $4.87 billion in capitalized costs at risk if deadlines are missed.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2015filed February 26, 2016Financial Statements
FY2015 against FY2014
| Line item | FY2015FY2014 | Change |
|---|---|---|
| Revenue | $11.69B$14.58B | −19.9% |
| SG&A Expenses | $1.27B$1.26B | +0.7% |
| Operating Expenses | $8.85B$10.48B | −15.6% |
| Operating Income | $2.84B$4.10B | −30.7% |
| Interest Expense | $265.00M$274.00M | −3.3% |
| Net Income | $1.97B$2.84B | −30.8% |
| EPS (Basic) | $2.47$3.52 | −29.8% |
| EPS (Diluted) | $2.47$3.52 | −29.8% |
| Shares Outstanding (Basic) | 797.00M806.00M | −1.1% |
| Shares Outstanding (Diluted) | 798.00M808.00M | −1.2% |
05—Questions
Frequently Asked Questions
Why did revenue and earnings decline so sharply in 2015?
The filing attributes the decline primarily to a $2.65 billion drop in casino revenues at the Macao operating properties, driven by lower Rolling Chip (VIP) volume, and a $259.4 million drop in Marina Bay Sands casino revenues driven by lower Rolling Chip win percentage. Operating expenses fell by $1.64 billion, but this decline was smaller than the revenue decline.
How much debt does the company have and when does it mature?
Long-term debt was $9.37 billion at December 31, 2015. The filing states principal amounts of $1.36 billion, $2.25 billion and $5.09 billion maturing in 2018, 2019 and 2020, respectively. The company reports $2.97 billion available for borrowing under its U.S., Macao and Singapore credit facilities net of letters of credit.
What are the biggest long-term risks to the Macao business?
The Macao subconcession expires June 26, 2022, and the government may redeem it beginning December 26, 2017 with one year's notice. Land concession deadlines of November 15, 2016 for The Parisian Macao and December 31, 2016 for Sands Cotai Central could lead to losing those concessions and a charge against capitalized costs if not met or extended.
How is the company returning cash to shareholders?
During 2015 the company paid quarterly dividends of $0.65 per share, totaling $2.07 billion recorded against retained earnings, and repurchased $205.1 million of stock. In January 2016 the Board declared a $0.72 quarterly dividend, estimated at about $572 million, payable March 31, 2016, and stated it expects this level to continue through 2016. About $2.0 billion of the 2014 repurchase authorization remained at year end, expiring October 2016.
06—Continue