LAS VEGAS SANDS CORP. The following discussion should be read in conjunction with, and is qualified in its entirety by, the condensed consolidated financial statements and the notes thereto, and other financial information included in this Form 10-Q. Certain statements in this "Management's Discussion and Analysis of Financial Condition and Results of Operations" are forward-looking statements. See "Special Note Regarding Forward-Looking Statements."
Operations
We view each of ourIntegrated Resort properties as an operating segment. Our operating segments inMacao consist of The Venetian Macao; The Londoner Macao; The Parisian Macao; ThePlaza Macao and Four Seasons Macao; and the Sands Macao. Our operating segment inSingapore isMarina Bay Sands . OnFebruary 23, 2022 , we closed the sale of ourLas Vegas real property and operations including The Venetian Resort Las Vegas and theSands Expo and Convention Center (the "Las Vegas Operations") for$6.25 billion . At closing, we received approximately$5.05 billion in cash proceeds, before transaction costs and working capital adjustments of$77 million , a$1.20 billion seller financing loan and recognized a gain on disposal of$3.61 billion , before income tax expense of$750 million , during the six months endedJune 30, 2022 .
COVID-19 Pandemic Update
In earlyJanuary 2020 , an outbreak of a respiratory illness caused by a novel coronavirus ("COVID-19") was identified and the disease has since spread rapidly across the world causing theWorld Health Organization to declare the outbreak of a pandemic onMarch 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 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. Visitation to theMacao Special Administrative Region ("Macao") ofthe 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 mainlandChina who in general may enterMacao 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. Our operations inMacao will continue to be impacted and subject to changes in the government policies ofMacao, China ,Hong Kong and other jurisdictions inAsia addressing travel and public health measures associated with COVID-19. Following an outbreak inMacao in mid-June, theMacao 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. OurMacao gaming operations remained open during the six months endedJune 30, 2022 . Guest visitation to the properties, however, was adversely affected during the six months endedJune 30, 2022 due to the various outbreaks that occurred inShanghai ,Hong Kong ,Guangdong andMacao , which resulted in tighter travel restrictions. OnJuly 9, 2022 , theMacao government issued executive order 115/2022 ordering casinos and all non-essential businesses to close fromJuly 11 to July 18 in an attempt to control a recent outbreak of COVID-19 inMacao . OnJuly 16, 2022 , theMacao government announced an extension of this executive order throughJuly 22 . OnJuly 20, 2022 , theMacao government announced a consolidation period, which would start onJuly 23, 2022 and end onJuly 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. 30
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The timing and manner in which our casinos, restaurants and shopping malls will reopen and/or operate at full capacity are currently unknown.
As with prior periods, in support of theMacao government's initiatives to fight the COVID-19 Pandemic, throughout the six months endedJune 30, 2022 and in June in particular, we have provided both towers of the Sheraton Grand Macao hotel and also The Parisian Macao hotel to theMacao government to house individuals for quarantine and medical observation purposes. Our ferry operations betweenMacao andHong Kong remain suspended. The timing and manner in which our ferry operations will be able to resume are currently unknown. OurMacao operations have been significantly impacted by the reduced visitation toMacao . TheMacao government announced total visitation from mainlandChina toMacao decreased approximately 12.2% and 78.1%, during the six months endedJune 30, 2022 , as compared to the same period in 2021 and 2019 (pre-pandemic), respectively. TheMacao government also announced gross gaming revenue decreased approximately 46.4% and 82.4%, during the six months endedJune 30, 2022 , as compared to the same period in 2021 and 2019, respectively. InSingapore ,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 onDecember 23, 2021 throughJanuary 20, 2022 . The VTL program was terminated onMarch 31, 2022 , and the Vaccinated Travel Framework ("VTF") was launched onApril 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 enterSingapore , without entry approvals or taking VTL transport and startingApril 26, 2022 , these travelers are no longer required to take a COVID-19 test before departing forSingapore . Operations at Marina Bay Sands will continue to be impacted and subject to changes in the government policies ofSingapore and other jurisdictions inAsia addressing travel and public health measures associated with COVID-19. Visitation toMarina Bay Sands continues to be impacted by the effects of the COVID-19 Pandemic; however, visitation has since increased since restrictions have been lifted. TheSingapore Tourism Board ("STB") announced total visitation toSingapore 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. The latest available statistics show that passenger traffic atChangi Airport has been on the rise reaching approximately 2.5 million inMay 2022 , up from approximately 1.9 million inApril 2022 , and averaging above 40% of pre-pandemic levels as the travel industry continues to recover from the impact of COVID-19. At ourMacao properties, we are adhering to social distancing requirements, which include reduced seating at table games and a decreased number of active slot machines on the casino floor compared to pre-COVID-19 levels. Additionally, there is uncertainty whether the impact of the COVID-19 Pandemic on operations will continue in future periods. If ourIntegrated Resorts are not permitted to resume normal operations, travel restrictions such as those related to inbound travel from other countries are not modified or eliminated, there is a resumption of the suspension of the China Individual Visit Scheme, or the global response to contain the COVID-19 Pandemic escalates or is unsuccessful, our operations, cash flows and financial condition will be further materially impacted. While our properties were open and operating at reduced levels due to lower visitation and required safety measures in place as described above during the six months endedJune 30, 2022 , the current economic and regulatory environment on a global basis and in each of our jurisdictions continue to evolve. We 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 our current operations. We have 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 our LVSC Revolving Facility, 2018 SCL Revolving Facility and 2012 Singapore Revolving Facility, respectively, as ofJune 30, 2022 . We believe we are able to support continuing operations, complete the major construction projects that are underway, proceed with theMacao concession renewal process and respond to the current COVID-19 Pandemic challenges. We have taken various 31
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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 inMacao is administered by the government through concession agreements awarded to three different concessionaires and three subconcessionaires, of whichVenetian Macau Limited ("VML," a subsidiary of Sands China Ltd.) is one. OnJune 23, 2022 , an extension was approved and authorized by theMacao government and executed betweenVML and Galaxy Casino, S.A. , pursuant to which the subconcession has been extended fromJune 26, 2022 toDecember 31, 2022 . VML paid theMacao government47 million patacas (approximately$6 million at exchange rates in effect onJune 30, 2022 ) and will provide a bank guarantee bySeptember 23, 2022 of2.31 billion patacas (approximately$286 million at exchange rates in effect onJune 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") andVenetian 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 theMacao 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. OnJune 21, 2022 , theMacao Legislative Assembly passed a draft bill entitled Amendment to Law No. 16/2001 to amendMacao's gaming law, which was published in theMacao Official Gazette onJune 22, 2022 as Law No. 7/2022, and became effective onJune 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 to5 billion patacas (approximately$619 million at exchange rates in effect onJune 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. OnJuly 5, 2022 , theMacao 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 inMacao . The regulation includes details on the process of bidding for the gaming concessions, qualifications of the companies bidding and the criteria for granting them. We continue to believe we will be successful in extending the term of our subconcession and/or obtaining a new gaming concession when our current subconcession expires; however, it is possible theMacao government could further change or interpret the associated gaming laws in a manner that could negatively impact us. Under our 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 inMacao 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 us 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 cancelled, in whole or in part, and the related outstanding balances and accrued interest, if any, becoming immediately due and payable. 32
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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 our debt would have a material adverse effect on our business, financial condition, results of operations and cash flows. We intend to follow the process for a concession renewal as indicated above.
Marina Bay Sands Gaming License
InApril 2022 , we paid72 million Singapore dollars ("SGD," approximately$53 million at exchange rates in effect at the time of the transaction) to theSingapore Casino Regulatory Authority as part of the process to renew its gaming license at Marina Bay Sands, which will now expire inApril 2025 .
Critical Accounting Policies and Estimates
For a discussion of our significant accounting policies and estimates, please refer to "Management's Discussion and Analysis of Financial Condition and Results of Operations" presented in our 2021 Annual Report on Form 10-K filed onFebruary 4, 2022 . There were no newly identified significant accounting estimates during the six months endedJune 30, 2022 , nor were there any material changes to the critical accounting policies and estimates discussed in our 2021 Annual Report.
Recent Accounting Pronouncements
See related disclosure at "Item 1 - Financial Statements - Notes to Condensed Consolidated Financial Statements - Note 1 - Organization and Business of Company - Recent Accounting Pronouncements."
Operating Results
Key Operating Revenue Measurements
Operating revenues at The Venetian Macao, The Londoner Macao, The ParisianMacao , ThePlaza Macao and Four Seasons Macao,Marina Bay Sands and ourLas Vegas Operating Properties , prior to its sale onFebruary 23, 2022 , were dependent upon the volume of patronswho stay at the hotel, which affects the price charged for hotel rooms and our gaming volume. Operating revenues at SandsMacao are principally driven by the volume of gaming patronswho visit the property on a daily basis. Management utilizes the following volume and pricing measures in order to evaluate past performance and assist in forecasting future revenues. The various volume measurements indicate our ability to attract patrons to ourIntegrated Resorts . In casino operations, win and hold percentages indicate the amount of revenue to be expected based on volume. In hotel operations, average daily rate and revenue per available room indicate the demand for rooms and our ability to capture that demand. In mall operations, base rent per square foot indicates our ability to attract and maintain profitable tenants for our leasable space.
The following are the key measurements we use to evaluate operating revenues:
Casino revenue measurements forMacao andSingapore :Macao andSingapore table games are segregated into two groups: Rolling Chip play (composed of VIP players) and Non-Rolling Chip play (mostly non-VIP players). The volume measurement for Rolling Chip play is non-negotiable gaming chips wagered and lost. The volume measurement for Non-Rolling Chip play is table games drop ("drop"), which is net markers issued (credit instruments), cash deposited in the table drop boxes and gaming chips purchased and exchanged at the cage. Rolling Chip and Non-Rolling Chip volume measurements are not comparable as they are two distinct measures of volume. The amounts wagered and lost for Rolling Chip play are substantially higher than the amounts dropped for Non-Rolling Chip play. Slot handle, also a volume measurement, is the gross amount wagered for the period cited. We view Rolling Chip win as a percentage of Rolling Chip volume, Non-Rolling Chip win as a percentage of drop and slot hold (amount won by the casino) as a percentage of slot handle. Win or hold percentage represents the percentage of Rolling Chip volume, Non-Rolling Chip drop or slot handle that is won by the casino and recorded as casino revenue. Our win and hold percentages are calculated before discounts, commissions, deferring revenue associated with our loyalty programs and allocating casino revenues related to goods and services provided to patrons on a complimentary basis. Our Rolling Chip table games are expected to produce a win percentage of 33
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3.15% to 3.45% inMacao andSingapore , and our Non-Rolling Chip table games have produced a trailing 12-month win percentage of 26.4%, 22.1%, 23.6%, 25.1%, 18.6% and 15.5% at The Venetian Macao, The Londoner Macao, The Parisian Macao, ThePlaza Macao and Four Seasons Macao, Sands Macao andMarina Bay Sands , respectively. Our slot machines have produced a trailing 12-month hold percentage of 3.9%, 3.7%, 3.5%, 7.4%, 2.8% and 4.2% at The Venetian Macao, The Londoner Macao, The Parisian Macao, ThePlaza Macao and Four Seasons Macao, Sands Macao andMarina Bay Sands , respectively. Actual win and hold percentages may vary from our expected win percentage and the trailing 12-month win and hold percentages. Generally, slot machine play is conducted on a cash basis. InMacao andSingapore , 11.8% and 12.0%, respectively, of our table games play was conducted on a credit basis for the six months endedJune 30, 2022 . Casino revenue measurements for theU.S. : The volume measurements in theU.S. were slot handle, as previously described, and table games drop, which was the total amount of cash and net markers issued (credit instruments) deposited in the table drop box. We viewed table games win as a percentage of drop and slot hold as a percentage of slot handle. Our win and hold percentages were calculated before discounts, commissions, deferring revenue associated with our loyalty programs and allocating casino revenues related to goods and services provided to patrons on a complimentary basis. Similar toMacao andSingapore , slot machine play was generally conducted on a cash basis. Hotel revenue measurements: Performance indicators used are occupancy rate (a volume indicator), which is the average percentage of available hotel rooms occupied during a period and average daily room rate ("ADR," a price indicator), which is the average price of occupied rooms per day. Available rooms exclude those rooms unavailable for occupancy during the period due to renovation, development or other requirements (such as government mandated closure, lodging for team members and usage by theMacao government for quarantine measures). The calculations of the occupancy rate and ADR include the impact of rooms provided on a complimentary basis. Revenue per available room ("RevPAR") represents a summary of hotel ADR and occupancy. Because not all available rooms are occupied, ADR is normally higher than RevPAR. Reserved rooms where the guests do not show up for their stay and lose their deposit, or where guests check out early, may be re-sold to walk-in guests. Mall revenue measurements: Occupancy, base rent per square foot and tenant sales per square foot are used as performance indicators. Occupancy represents gross leasable occupied area ("GLOA") divided by gross leasable area ("GLA") at the end of the reporting period. GLOA is the sum of: (1) tenant occupied space under lease and (2) tenants no longer occupying space, but paying rent. GLA does not include space currently under development or not on the market for lease. Base rent per square foot is the weighted average base or minimum rent charge in effect at the end of the reporting period for all tenants that would qualify to be included in occupancy. Tenant sales per square foot is the reported comparable sales for the trailing 12 months divided by the comparable square footage for the same period. Only tenants that have been open for a minimum of 12 months are included in the tenant sales per square foot calculation.
Three Months Ended
Summary Financial Results Our financial results were adversely impacted as a result of decreased visitation at ourMacao operating properties as tighter border restrictions were re-introduced as a result of increased positive COVID-19 cases inMacao and the surrounding regions, partially offset by increased visitation atMarina Bay Sands due to the VTF program and loosened pandemic-related restrictions. See "COVID-19 Pandemic" for further information. Net revenues for the three months endedJune 30, 2022 , were$1.05 billion , compared to$1.17 billion for the three months endedJune 30, 2021 . Operating loss was$147 million for the three months endedJune 30, 2022 , compared to$139 million for the three months endedJune 30, 2021 . Net loss from continuing operations was$414 million for the three months endedJune 30, 2022 , compared to$280 million for the three months endedJune 30, 2021 . 34
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Operating Revenues
Our net revenues consisted of the following:
Three Months Ended June 30,
Percent
2022 2021 Change
(Dollars in millions)
Casino $ 709 $ 843 (15.9) %
Rooms 97 115 (15.7) %
Food and beverage 63 50 26.0 %
Mall 148 148 - %
Convention, retail and other 28 17 64.7 %
Total net revenues $ 1,045 $ 1,173 (10.9) %
Consolidated net revenues were $1.05 billion for the three months ended June 30,
2022 , a decrease of $128 million compared to $1.17 billion for the three months
ended June 30, 2021 . The decrease is due to a $480 million decrease at our Macao
operations, partially offset by a $352 million increase at Marina Bay Sands.
Net casino revenues decreased $134 million compared to the three months ended
June 30, 2021 . The change was driven by a $411 million decrease at our Macao
operations due to lower visitation across our properties resulting in decreased
table games and slot volumes. Casino revenues at Marina Bay Sands increased
$277 million due to increases in Rolling Chip volume and Non-Rolling Chip drop,
driven by increased visitation. The following table summarizes the results of
our casino activity:
Three Months Ended June 30,
2022 2021 Change
(Dollars in millions)
Macao Operations:
The Venetian Macao
Total net casino revenues $ 91 $ 307 (70.4) %
Non-Rolling Chip drop $ 332 $ 999 (66.8) %
Non-Rolling Chip win percentage 26.2 % 27.6 % (1.4) pts
Rolling Chip volume $ 264 $ 1,510 (82.5) %
Rolling Chip win percentage 4.76 % 4.91 % (0.15) pts
Slot handle $ 254 $ 551 (53.9) %
Slot hold percentage 4.9 % 3.7 % 1.2 pts
The Londoner Macao
Total net casino revenues $ 42 $ 133 (68.4) %
Non-Rolling Chip drop $ 175 $ 551 (68.2) %
Non-Rolling Chip win percentage 23.2 % 21.0 % 2.2 pts
Rolling Chip volume $ 222 $ 1,126 (80.3) %
Rolling Chip win percentage 4.35 % 4.76 % (0.41) pts
Slot handle $ 163 $ 286 (43.0) %
Slot hold percentage 4.0 % 3.8 % 0.2 pts
The Parisian Macao
Total net casino revenues $ 24 $ 69 (65.2) %
Non-Rolling Chip drop $ 91 $ 358 (74.6) %
Non-Rolling Chip win percentage 22.4 % 20.6 % 1.8 pts
Rolling Chip volume $ 48 $ 32 50.0 %
Rolling Chip win percentage 14.20 % 8.24 % 5.96 pts
Slot handle $ 64 $ 244 (73.8) %
Slot hold percentage 4.7 % 3.0 % 1.7 pts
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Three Months Ended June 30,
2022 2021 Change
(Dollars in millions)
The Plaza Macao and Four Seasons Macao
Total net casino revenues $ 38 $ 74 (48.6) %
Non-Rolling Chip drop $ 101 $ 350 (71.1) %
Non-Rolling Chip win percentage 26.4 % 21.4 % 5.0 pts
Rolling Chip volume $ 489 $ 529 (7.6) %
Rolling Chip win percentage 4.90 % 4.42 % 0.48 pts
Slot handle $ 3 $ 18 (83.3) %
Slot hold percentage 5.9 % 3.5 % 2.4 pts
Sands Macao
Total net casino revenues $ 14 $ 37 (62.2) %
Non-Rolling Chip drop $ 57 $ 131 (56.5) %
Non-Rolling Chip win percentage 17.6 % 16.9 % 0.7 pts
Rolling Chip volume $ 66 $ 332 (80.1) %
Rolling Chip win percentage 6.86 % 6.51 % 0.35 pts
Slot handle $ 120 $ 161 (25.5) %
Slot hold percentage 2.7 % 3.3 % (0.6) pts
Singapore Operations:
Marina Bay Sands
Total net casino revenues $ 500 $ 223 124.2 %
Non-Rolling Chip drop $ 1,137 $ 553 105.6 %
Non-Rolling Chip win percentage 18.5 % 18.1 % 0.4 pts
Rolling Chip volume $ 5,394 $ 612 781.4 %
Rolling Chip win percentage 4.29 % 6.44 % (2.15) pts
Slot handle $ 4,090 $ 3,165 29.2 %
Slot hold percentage 4.4 % 4.3 % 0.1 pts
In our experience, average win percentages remain fairly consistent when
measured over extended periods of time with a significant volume of wagers, but
can vary considerably within shorter time periods as a result of the statistical
variances associated with games of chance in which large amounts are wagered.
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Room revenues decreased$18 million compared to the three months endedJune 30, 2021 . The decrease was primarily due to decreased occupancy rates and decreased RevPAR driven by lower visitation at ourMacao operations compared to the three months endedJune 30, 2021 . The decrease was partially offset by an increase at Marina Bay Sands as visitation increased due to the VTF program and loosened pandemic-related restrictions. The following table summarizes the results of our room activity: Three Months Ended June 30, 2022 2021 Change (Room revenues in millions) Macao Operations: The Venetian Macao Total room revenues$ 12 $ 24 (50.0) % Occupancy rate 36.8 % 58.6 % (21.8) pts Average daily room rate (ADR)$ 137 $ 159 (13.8) % Revenue per available room (RevPAR)$ 50 $ 93 (46.2) % The Londoner Macao Total room revenues$ 14 $ 28 (50.0) % Occupancy rate 24.9 % 44.2 % (19.3) pts Average daily room rate (ADR)$ 137 $ 152 (9.9) % Revenue per available room (RevPAR)$ 34 $ 67 (49.3) % The Parisian Macao Total room revenues$ 7 $ 17 (58.8) % Occupancy rate 37.0 % 58.4 % (21.4) pts Average daily room rate (ADR)$ 100 $ 119 (16.0) % Revenue per available room (RevPAR)$ 37 $ 70 (47.1) % ThePlaza Macao and Four Seasons Macao Total room revenues$ 6 $ 12 (50.0) % Occupancy rate 23.3 % 48.4 % (25.1) pts Average daily room rate (ADR)$ 412 $ 445 (7.4) % Revenue per available room (RevPAR)$ 96 $ 215 (55.3) % Sands Macao Total room revenues$ 2 $ 2 - % Occupancy rate 56.6 % 71.1 % (14.5) pts Average daily room rate (ADR)$ 127 $ 141 (9.9) % Revenue per available room (RevPAR)$ 72 $ 100 (28.0) % Singapore Operations: Marina Bay Sands(1) Total room revenues$ 56 $ 32 75.0 % Occupancy rate 93.9 % 67.9 % 26.0 pts Average daily room rate (ADR)$ 330 $ 221 49.3 % Revenue per available room (RevPAR)$ 310 $ 150 106.7 % __________________________
(1) During the three months ended
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Food and beverage revenues increased$13 million compared to the three months endedJune 30, 2021 . The increase was due to$24 million in increased business volume at food and beverage outlets at Marina Bay Sands, including a$19 million increase at major food outlets and$5 million increase in banquets driven by loosened pandemic-related restrictions. This increase was partially offset by an$11 million decrease at ourMacao operations due to lower business volume at most outlets. Mall revenues were flat compared to the three months endedJune 30, 2021 . A$16 million decrease in mall revenues inMacao , driven by decreases in base rent and turnover rent and an increase in rent concessions granted to our mall tenants inMacao , was offset by a$16 million increase in mall revenues inSingapore , driven by a decrease in rent concessions granted to our mall tenants inSingapore . For further information related to the financial performance of our malls, see "Additional Information Regarding our Retail Mall Operations." The following table summarizes the results of our malls on the Cotai Strip inMacao and inSingapore : Three Months Ended June 30, 2022 2021 Change (Mall revenues in millions) Macao Operations: Shoppes at Venetian Total mall revenues$ 41 $ 49 (16.3) % Mall gross leasable area (in square feet) 814,720 814,731 - % Occupancy 75.1 % 79.2 % (4.1) pts Base rent per square foot$ 299 $ 297 0.7 % Tenant sales per square foot(1)$ 1,169 $ 1,227 (4.7) % Shoppes at Londoner Total mall revenues$ 12 $ 15 (20.0) % Mall gross leasable area (in square feet) 605,429 520,941 16.2 % Occupancy 58.3 % 60.9 % (2.6) pts Base rent per square foot$ 141 $ 136 3.7 % Tenant sales per square foot(1)$ 1,407 $ 1,058 33.0 % Shoppes at Parisian Total mall revenues $ 7$ 10 (30.0) % Mall gross leasable area (in square feet) 296,322 296,145 0.1 % Occupancy 73.2 % 78.1 % (4.9) pts Base rent per square foot$ 129 $ 147 (12.2) % Tenant sales per square foot(1)$ 475 $ 593 (19.9) % Shoppes at Four Seasons Total mall revenues$ 33 $ 34 (2.9) % Mall gross leasable area (in square feet) 248,663 244,104 1.9 % Occupancy 94.4 % 93.9 % 0.5 pts Base rent per square foot$ 544 $ 548 (0.7) % Tenant sales per square foot(1)$ 5,139 $ 5,389 (4.6) % Singapore Operations: The Shoppes at Marina Bay Sands Total mall revenues$ 55 $ 39 41.0 % Mall gross leasable area (in square feet) 622,038 620,427 0.3 % Occupancy 99.7 % 98.2 % 1.5 pts Base rent per square foot$ 277 $ 267 3.7 % Tenant sales per square foot(1)$ 2,051 $ 1,366 50.1 % 38
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__________________________
Note: This table excludes the results of our mall operations at Sands Macao. As a result of the COVID-19 Pandemic, tenants were provided rent concessions during the three months endedJune 30, 2022 and 2021. Base rent per square foot presented above excludes the impact of these rent concessions. (1) Tenant sales per square foot is the sum of reported comparable sales for the trailing 12 months divided by the comparable square footage for the same period.
Convention, retail and other revenues increased
Operating Expenses
Our operating expenses consisted of the following:
Three Months Ended June 30,
Percent
2022 2021 Change
(Dollars in millions)
Casino $ 445 $ 574 (22.5) %
Rooms 41 42 (2.4) %
Food and beverage 73 60 21.7 %
Mall 19 16 18.8 %
Convention, retail and other 24 19 26.3 %
Provision for credit losses 2 2 - %
General and administrative 238 219 8.7 %
Corporate 55 56 (1.8) %
Pre-opening 3 4 (25.0) %
Development 22 37 (40.5) %
Depreciation and amortization 256 258 (0.8) %
Amortization of leasehold interests in land 14 14 - %
Loss on disposal or impairment of assets - 11 (100.0) %
Total operating expenses $ 1,192 $ 1,312 (9.1) %
Operating expenses were $1.19 billion for the three months ended June 30, 2022 ,
a decrease of $120 million compared to $1.31 billion for the three months ended
June 30, 2021 , primarily driven by a $129 million decrease in casino expenses,
due to a decrease in gaming taxes as a result of decreased gaming revenues in
Macao , a $15 million decrease in development expense and an $11 million decrease
in loss on disposal or impairment of assets, partially offset by a $19 million
increase in general and administrative expense.
Casino expenses decreased $129 million compared to the three months ended June
30, 2021 . The decrease was primarily attributable to a $136 million decrease in
gaming taxes due to decreased revenues, as previously described. The $411
million decrease in casino revenue at our Macao operating properties is subject
to a 39% tax rate, whereas the $277 million increase in casino revenue at Marina
Bay Sands is subject to a lower tax rate.
Food and beverage expenses increased $13 million compared to the three months
ended June 30, 2021 . An increase of $17 million at Marina Bay Sands was due to
increased food outlet and banquet volumes, partially offset by a decrease of
$4 million at our Macao operations due to lower business volume.
Convention, retail and other expenses increased $5 million compared to the three
months ended June 30, 2021 , primarily driven by an $6 million increase at Marina
Bay Sands, partially offset by a $1 million decrease in ferry expenses resulting
from decreases in operating and maintenance costs as ferries were under dry
dock.
General and administrative expenses increased $19 million compared to the three
months ended June 30, 2021 . The increase was primarily due to an increase of
$22 million at Marina Bay Sands, partially offset by a decrease of $3 million at
our Macao operations. The increase at Marina Bay Sands was primarily driven by
an increase in payroll, marketing and property operation costs. The decrease at
our Macao operations was primarily driven by decreased marketing and property
operations costs.
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Development expenses were$22 million for the three months endedJune 30, 2022 , compared to$37 million for the three months endedJune 30, 2021 . During the three months endedJune 30, 2022 , the costs were associated with our evaluation and pursuit of new business opportunities, primarily inTexas and digital gaming related efforts. Development costs are expensed as incurred. There was no loss on disposal or impairment of assets for three months endedJune 30, 2022 , compared to$11 million for the three months endedJune 30, 2021 . The losses incurred for the three months endedJune 30, 2021 , were primarily due to asset disposal and demolition costs at The Londoner Macao.
Segment Adjusted Property EBITDA
The following table summarizes information related to our segments:
Three Months Ended June 30,
Percent
2022 2021 Change
(Dollars in millions)
Macao:
The Venetian Macao $ (21) $ 108 (119.4) %
The Londoner Macao (54) (5) 980.0 %
The Parisian Macao (29) - NM
The Plaza Macao and Four Seasons Macao 17 44 (61.4) %
Sands Macao (22) (13) 69.2 %
Ferry Operations and Other (1) (2) (50.0) %
(110) 132 (183.3) %
Marina Bay Sands 319 112 184.8 %
Consolidated adjusted property EBITDA(1) $ 209 $ 244 (14.3) %
__________________________
(1) Consolidated adjusted property EBITDA, which is a non-GAAP financial measure, is used by management as the primary measure of the operating performance of our segments. Consolidated adjusted property EBITDA 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, includingLas 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. We have 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, our presentation of consolidated adjusted property EBITDA may not be directly comparable to similarly titled measures presented by other companies. 40
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Three Months Ended June 30,
2022 2021
(In millions)
Consolidated adjusted property EBITDA $ 209 $ 244
Other Operating Costs and Expenses
Stock-based compensation(a) (6) (3)
Corporate (55) (56)
Pre-opening (3) (4)
Development (22) (37)
Depreciation and amortization (256) (258)
Amortization of leasehold interests in land (14) (14)
Loss on disposal or impairment of assets - (11)
Operating loss (147) (139)
Other Non-Operating Costs and Expenses
Interest income 14 1
Interest expense, net of amounts capitalized (162) (158)
Other income (expense) (9) 10
Income tax (expense) benefit (110) 6
Net loss from continuing operations $
(414)
(a)During the three months endedJune 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. Adjusted property EBITDA at ourMacao operations decreased$242 million compared with the three months endedJune 30, 2021 , primarily due to decreases in casino, room, food and beverage and mall revenues driven by decreased visitation at our properties as tighter border restrictions were introduced as a result of increased positive COVID-19 cases in the region. Adjusted property EBITDA at Marina Bay Sands increased$207 million compared to the three months endedJune 30, 2021 , primarily due to increases in casino, room and food and beverage operations due to increased visitation and loosened pandemic-related restrictions.
Interest Expense
The following table summarizes information related to interest expense:
Three Months Ended June 30,
2022 2021
(Dollars in millions)
Interest cost $ 163 $ 162
Less - capitalized interest (1) (4)
Interest expense, net $ 162 $ 158
Weighted average total debt balance $ 15,103 $ 14,590
Weighted average interest rate 4.3 %
4.4 %
Interest cost increased$1 million compared to the three months endedJune 30, 2021 , primarily resulting from an increase in our weighted average total debt balance primarily due to$951 million drawn on the SCL Revolving Facility during the twelve months endedJune 30, 2022 . The increase was partially offset by a decrease in our weighted average interest rate from 4.4% to 4.3% during the three months endedJune 30, 2022 . The decrease in interest cost was primarily due to the issuance of the 2.300%, 2.850% and 3.250% SCL Senior Notes inSeptember 2021 , which carry a lower interest rate than the 4.600% SCL Senior Notes extinguished inSeptember 2021 .
Other Factors Affecting Earnings
Other expense was$9 million for the three months endedJune 30, 2022 , compared to other income of$10 million for the three months endedJune 30, 2021 . Other expense during the three months endedJune 30, 2022 , was primarily attributable to$15 million of foreign currency transaction losses driven byU.S. dollar denominated debt 41
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held by SCL, partially offset by
Our income tax expense was$110 million on a loss before income taxes of$304 million for the three months endedJune 30, 2022 , resulting in a 36.2% effective income tax rate. This compares to a (2.1)% effective income tax rate for the three months endedJune 30, 2021 . The income tax expense for the three months endedJune 30, 2022 , reflects a 17% statutory tax rate on ourSingapore operations and a 21% corporate income tax on our domestic operations. Our operations inMacao are subject to a 12% statutory income tax rate, but in connection with the 35% gaming tax, our subsidiaries inMacao and their peers received an income tax exemption on gaming operations throughJune 26, 2022 . InJuly 2022 , we requested an additional extension of our income tax exemption for gaming operations throughDecember 31, 2022 ; however, there is no assurance we will receive the additional extension. Our income tax expense is based on the Company's estimated annual effective tax rate for the year applied to year-to-date operating results in accordance with interim accounting guidelines.
The net loss attributable to our noncontrolling interests was
Six Months Ended
Summary Financial Results
Our financial results were adversely impacted as a result of decreased visitation to our properties inMacao due to the COVID-19 Pandemic, as tighter border restrictions were introduced as a result of increased positive COVID-19 cases inMacao and the surrounding regions, partially offset by increased visitation at Marina Bay Sands due to the VTL and VTF programs and loosened pandemic-related restrictions. See "COVID-19 Pandemic" for further information. Net revenues for the six months endedJune 30, 2022 , were$1.99 billion , compared to$2.37 billion for the six months endedJune 30, 2021 . Operating loss was$449 million for the six months endedJune 30, 2022 , compared to$235 million for the six months endedJune 30, 2021 . Net loss from continuing operations was$892 million for the six months endedJune 30, 2022 , compared to$560 million for the six months endedJune 30, 2021 .
Operating Revenues
Our net revenues consisted of the following:
Six Months Ended June 30,
Percent
2022 2021 Change
(Dollars in millions)
Casino $ 1,336 $ 1,708 (21.8) %
Rooms 192 211 (9.0) %
Food and beverage 116 106 9.4 %
Mall 297 304 (2.3) %
Convention, retail and other 47 40 17.5 %
Total net revenues $ 1,988 $ 2,369 (16.1) %
Consolidated net revenues were $1.99 billion for the six months ended June 30,
2022 , a decrease of $381 million compared to $2.37 billion for the six months
ended June 30, 2021 , due to a decrease of $707 million at our Macao operations.
The decrease at our Macao operations was due to decreased visitation compared to
the six months ended June 30, 2021 , as tighter border restrictions were
introduced as a result of increased positive COVID-19 cases in Macao and the
surrounding region. The $326 million increase at Marina Bay Sands was primarily
due to increased visitation driven by the VTL and VTF programs and loosened
pandemic-related restrictions.
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Net casino revenues decreased$372 million compared to the six months endedJune 30, 2021 . The decrease was driven by a$614 million decrease at ourMacao operations due to lower visitation across our properties resulting in decreased table games and slot volumes. Casino revenues at Marina Bay Sands increased by$242 million due to increases in Rolling Chip volume and Non-Rolling Chip drop, driven by an increase in play due to VTL and VTF programs and loosened pandemic-related restrictions. The following table summarizes the results of our casino activity: Six Months Ended June 30, 2022 2021 Change (Dollars in millions) Macao Operations: The Venetian Macao Total net casino revenues$ 248 $ 573 (56.7) % Non-Rolling Chip drop$ 968 $ 1,907 (49.2) % Non-Rolling Chip win percentage 25.3 % 27.5 % (2.2) pts Rolling Chip volume$ 984 $ 2,740 (64.1) % Rolling Chip win percentage 3.65 % 4.70 % (1.05) pts Slot handle$ 677 $ 1,013 (33.2) % Slot hold percentage 3.7 % 3.8 % (0.1) pts The Londoner Macao Total net casino revenues$ 121 $ 224 (46.0) % Non-Rolling Chip drop$ 529 $ 959 (44.8) % Non-Rolling Chip win percentage 22.5 % 21.3 % 1.2 pts Rolling Chip volume$ 591 $ 1,648 (64.1) % Rolling Chip win percentage 4.58 % 4.43 % 0.15 pts Slot handle$ 394 $ 483 (18.4) % Slot hold percentage 3.5 % 3.8 % (0.3) pts The Parisian Macao Total net casino revenues$ 75 $ 128 (41.4) % Non-Rolling Chip drop$ 271 $ 657 (58.8) % Non-Rolling Chip win percentage 24.5 % 21.7 % 2.8 pts Rolling Chip volume$ 209 $ 146 43.2 % Rolling Chip win percentage 9.39 % (0.53) % 9.92 pts Slot handle$ 187 $ 467 (60.0) % Slot hold percentage 3.7 % 3.2 % 0.5 pts ThePlaza Macao and Four Seasons Macao Total net casino revenues$ 93 $ 189 (50.8) % Non-Rolling Chip drop$ 316 $ 606 (47.9) % Non-Rolling Chip win percentage 26.1 % 22.5 % 3.6 pts Rolling Chip volume$ 1,063 $ 1,965 (45.9) % Rolling Chip win percentage 4.03 % 5.52 % (1.49) pts Slot handle$ 12 $ 22 (45.5) % Slot hold percentage 8.0 % 4.8 % 3.2 pts 43
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Six Months Ended June 30,
2022 2021 Change
(Dollars in millions)
Sands Macao
Total net casino revenues $ 31 $ 68 (54.4) %
Non-Rolling Chip drop $ 134 $ 253 (47.0) %
Non-Rolling Chip win percentage 18.6 % 16.1 % 2.5 pts
Rolling Chip volume $ 146 $ 816 (82.1) %
Rolling Chip win percentage 4.65 % 5.22 % (0.57) pts
Slot handle $ 244 $ 319 (23.5) %
Slot hold percentage 3.0 % 3.4 % (0.4) pts
Singapore Operations:
Marina Bay Sands
Total net casino revenues $ 768 $ 526 46.0 %
Non-Rolling Chip drop $ 1,932 $ 1,227 57.5 %
Non-Rolling Chip win percentage 18.2 % 18.6 % (0.4) pts
Rolling Chip volume $ 7,293 $ 2,123 243.5 %
Rolling Chip win percentage 4.03 % 5.83 % (1.80) pts
Slot handle $ 7,372 $ 6,910 6.7 %
Slot hold percentage 4.3 % 4.2 % 0.1 pts
U.S. Operations:
Las Vegas Operating Properties (1)
Total net casino revenues $ 61 $ 163 (62.6) %
Table games drop $ 257 $ 698 (63.2) %
Table games win percentage 13.6 % 13.0 % 0.6 pts
Slot handle $ 599 $ 1,625 (63.1) %
Slot hold percentage 8.2 % 8.4 % (0.2) pts
__________________________
(1)
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Room revenues decreased $19 million compared to the six months ended June 30,
2021 . The decrease was primarily due to decreased occupancy rates and decreased
RevPAR driven by reduced visitation across our Macao properties. The decrease
was partially offset by increases in occupancy and ADR at Marina Bay Sands
driven by increased visitation. The following table summarizes the results of
our room activity:
Six Months Ended June 30,
2022 2021 Change
(Room revenues in millions)
Macao Operations:
The Venetian Macao
Total room revenues $ 28 $ 43 (34.9) %
Occupancy rate 39.9 % 52.9 % (13.0) pts
Average daily room rate (ADR) $ 146 $ 158 (7.6) %
Revenue per available room (RevPAR) $ 58 $ 84 (31.0) %
The Londoner Macao
Total room revenues $ 33 $ 47 (29.8) %
Occupancy rate 26.5 % 40.4 % (13.9) pts
Average daily room rate (ADR) $ 146 $ 160 (8.8) %
Revenue per available room (RevPAR) $ 39 $ 65 (40.0) %
The Parisian Macao
Total room revenues $ 18 $ 29 (37.9) %
Occupancy rate 39.2 % 52.6 % (13.4) pts
Average daily room rate (ADR) $ 110 $ 119 (7.6) %
Revenue per available room (RevPAR) $ 43 $ 62 (30.6) %
The Plaza Macao and Four Seasons Macao
Total room revenues $ 15 $ 23 (34.8) %
Occupancy rate 29.5 % 46.1 % (16.6) pts
Average daily room rate (ADR) $ 429 $ 439 (2.3) %
Revenue per available room (RevPAR) $ 127 $ 202 (37.1) %
Sands Macao
Total room revenues $ 4 $ 5 (20.0) %
Occupancy rate 56.9 % 71.3 % (14.4) pts
Average daily room rate (ADR) $ 132 $ 140 (5.7) %
Revenue per available room (RevPAR) $ 75 $ 100 (25.0) %
Singapore Operations:
Marina Bay Sands(1)
Total room revenues $ 94 $ 64 46.9 %
Occupancy rate 88.9 % 65.4 % 23.5 pts
Average daily room rate (ADR) $ 296 $ 224 32.1 %
Revenue per available room (RevPAR) $ 263 $ 147 78.9 %
U.S. Operations:
Las Vegas Operating Properties (2)
Total room revenues $ 78 $ 152 (48.7) %
Occupancy rate 84.6 % 65.0 % 19.6 pts
Average daily room rate (ADR) $ 247 $ 194 27.3 %
Revenue per available room (RevPAR) $ 209 $ 126 65.9 %
__________________________
(1)During the six months ended
(2)
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Food and beverage revenues increased
Mall revenues decreased$7 million compared to the six months endedJune 30, 2021 . The decrease was primarily due to decreases of$8 million in overage rent and$7 million in base rent, and a$6 million government grant provided by the Singapore government in Q2 2021, partially offset by a$13 million decrease in rent concessions granted to our mall tenants inSingapore . For further information related to the financial performance of our malls, see "Additional Information Regarding our Retail Mall Operations." The following table summarizes the results of our malls on the Cotai Strip inMacao and inSingapore : Six Months Ended June 30,(1) 2022 2021 Change (Mall revenues in millions) Macao Operations: Shoppes at Venetian Total mall revenues$ 85 $ 95 (10.5) % Mall gross leasable area (in square feet) 814,720 814,731 - % Occupancy 75.1 % 79.2 % (4.1) pts Base rent per square foot$ 299 $ 297 0.7 % Tenant sales per square foot(2)$ 1,169 $ 1,227 (4.7) % Shoppes at Londoner Total mall revenues$ 26 $ 29 (10.3) % Mall gross leasable area (in square feet) 605,429 520,941 16.2 % Occupancy 58.3 % 60.9 % (2.6) pts Base rent per square foot$ 141 $ 136 3.7 % Tenant sales per square foot(2)$ 1,407 $ 1,058 33.0 % Shoppes at Parisian Total mall revenues$ 15 $ 20 (25.0) % Mall gross leasable area (in square feet) 296,322 296,145 0.1 % Occupancy 73.2 % 78.1 % (4.9) pts Base rent per square foot$ 129 $ 147 (12.2) % Tenant sales per square foot(2)$ 475 $ 593 (19.9) % Shoppes at Four Seasons Total mall revenues$ 67 $ 73 (8.2) % Mall gross leasable area (in square feet) 248,663 244,104 1.9 % Occupancy 94.4 % 93.9 % 0.5 pts Base rent per square foot$ 544 $ 548 (0.7) % Tenant sales per square foot(2)$ 5,139 $ 5,389 (4.6) % Singapore Operations: The Shoppes at Marina Bay Sands Total mall revenues$ 104 $ 86 20.9 % Mall gross leasable area (in square feet) 622,038 620,427 0.3 % Occupancy 99.7 % 98.2 % 1.5 pts Base rent per square foot$ 277 $ 267 3.7 % Tenant sales per square foot(2)$ 2,051 $ 1,366 50.1 % __________________________ Note: This table excludes the results of our mall operations at Sands Macao. As a result of the COVID-19 Pandemic, tenants were provided rent concessions during the six months endedJune 30, 2022 and 2021. Base rent per square foot presented above excludes the impact of these rent concessions. 46
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(1) As GLA, occupancy, base rent per square foot and tenant sales per square
foot are calculated as of
(2) Tenant sales per square foot is the sum of reported comparable sales for the trailing 12 months divided by the comparable square footage for the same period. Convention, retail and other revenues increased$7 million compared to the six months endedJune 30, 2021 , due primarily to a$13 million increase at Marina Bay Sands, partially offset by a$6 million decrease at ourMacao operations.
Operating Expenses
Our operating expenses consisted of the following:
Six
Months Ended
Percent
2022 2021 Change
(Dollars in millions)
Casino $ 913 $ 1,152 (20.7) %
Rooms 84 84 - %
Food and beverage 138 131 5.3 %
Mall 37 31 19.4 %
Convention, retail and other 46 41 12.2 %
Provision for credit losses 6 6 - %
General and administrative 456 444 2.7 %
Corporate 114 105 8.6 %
Pre-opening 7 9 (22.2) %
Development 82 46 78.3 %
Depreciation and amortization 520 513 1.4 %
Amortization of leasehold interests in land 28 28 - %
Loss on disposal or impairment of assets 6 14 (57.1) %
Total operating expenses $ 2,437 $ 2,604 (6.4) %
Operating expenses were $2.44 billion for the six months ended June 30, 2022 , a
decrease of $167 million compared to $2.60 billion for the six months ended June
30, 2021 . The decrease was primarily driven by a $239 million increase in casino
expenses.
Casino expenses decreased $239 million compared to the six months ended June 30,
2021 . The decrease was primarily attributable to a decrease of $233 million in
gaming taxes. The $614 million decrease in casino revenue at our Macao operating
properties is subject to a 39% tax rate, whereas the $242 increase in casino
revenue at Marina Bay Sands is subject to a lower tax rate.
Food and beverage expenses increased $7 million compared to the six months ended
June 30, 2021 . The increase was due to an increase of $12 million at Marina Bay
Sands, due to the increased business volume at food outlets and banquets,
partially offset by a decrease of $5 million at our Macao operations.
Convention, retail and other expenses increased $5 million compared to the six
months ended June 30, 2021 , primarily driven by an $6 million increase at Marina
Bay Sands, partially offset by a $2 million decrease in ferry expenses resulting
from decreases in operating and maintenance costs as ferries were under dry
dock.
General and administrative expenses increased $12 million compared to the six
months ended June 30, 2021 . The increase was primarily due to an increase of
$19 million at Marina Bay Sands, partially offset by a decrease of $7 million at
our Macao operations. The increase at Marina Bay Sands was primarily driven by
increases in marketing, payroll and property operations costs. The decrease at
our Macao operations was primarily driven by decreased marketing and property
operations costs.
Corporate expenses increased $9 million compared to the to the six months ended
June 30, 2021 , primarily due to a $4 million increase in corporate payroll and
related costs and $4 million in travel and related costs during the six months
ended June 30, 2022 .
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Development expenses were$82 million for the six months endedJune 30, 2022 , compared to$46 million for the six months endedJune 30, 2021 . During the six months endedJune 30, 2022 , the costs were associated with our evaluation and pursuit of new business opportunities primarily inFlorida andTexas and digital gaming related efforts. Development costs are expensed as incurred. Loss on disposal or impairment of assets decreased$8 million compared to the six months endedJune 30, 2021 , The losses incurred for the six months endedJune 30, 2022 were primarily due to asset disposals related to aircraft parts of$4 million and asset disposal and demolition costs, primarily at The LondonerMacao , The Venetian Macao and Sands Macao, as well as at our Corporate offices. The losses incurred for the six months endedJune 30, 2021 were primarily due to asset disposals and demolition costs related to The Londoner Macao.
Segment Adjusted Property EBITDA
The following table summarizes information related to our segments:
Six Months Ended June 30,
Percent
2022 2021 Change
(Dollars in millions)
Macao:
The Venetian Macao $ (2) $ 190 (101.1) %
The Londoner Macao (87) (28) 210.7 %
The Parisian Macao (40) (8) 400.0 %
The Plaza Macao and Four Seasons Macao 49 114 (57.0) %
Sands Macao (39) (31) 25.8 %
Ferry Operations and Other (2) (5) (60.0) %
(121) 232 (152.2) %
Marina Bay Sands 440 256 71.9 %
Consolidated adjusted property EBITDA(1) $ 319 $ 488 (34.6) %
Las Vegas Operating Properties (2) $ 63 $ 4 1,475.0 %
____________________
(1) Consolidated adjusted property EBITDA, which is a non-GAAP financial
measure, is used by management as the primary measure of the operating
performance of our segments. Consolidated adjusted property EBITDA 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. We have 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, our presentation of consolidated adjusted
property EBITDA may not be directly comparable to similarly titled measures
presented by other companies.
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Six Months Ended June 30,
2022 2021
(In millions)
Consolidated adjusted property EBITDA $ 319 Other Operating Costs and Expenses Stock-based compensation(a) (11) (8) Corporate (114) (105) Pre-opening (7) (9) Development (82) (46) Depreciation and amortization (520) (513) Amortization of leasehold interests in land (28)
(28)
Loss on disposal or impairment of assets (6)
(14)
Operating loss (449)
(235)
Other Non-Operating Costs and Expenses Interest income 18
2
Interest expense, net of amounts capitalized (318) (312) Other expense (31) (7) Income tax expense (112) (8) Net loss from continuing operations $ (892)
(a)During the six months endedJune 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.
(2)
Adjusted property EBITDA at ourMacao operations decreased$353 million compared to the six months endedJune 30, 2021 , primarily due to decreased casino, mall and room operations driven by decreased visitation at our properties as tighter boarder restrictions were introduced as a result of increased COVID-19 cases inMacao and the surrounding region. Adjusted property EBITDA at Marina Bay Sands increased$184 million compared to the six months endedJune 30, 2021 . The increase was primarily due to increased casino and mall operations driven by increased visitation and loosened pandemic-related restrictions.
Discontinued Operations
Adjusted property EBITDA at ourLas Vegas Operating Properties increased$59 million compared to the six months endedJune 30, 2021 . The increase was primarily due to increased casino and room operations driven by increased visitation to the property as capacity limits, restrictions on large gatherings and other restrictions were lifted, effectiveJune 1, 2021 , and theLas Vegas Operating Properties operated under pre-pandemic guidelines. 49
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Interest Expense
The following table summarizes information related to interest expense:
Six Months Ended June 30,
2022 2021
(Dollars in millions)
Interest cost $ 320 $ 320
Less - capitalized interest (2) (8)
Interest expense, net $ 318 $ 312
Weighted average total debt balance $ 15,029 $ 14,466
Weighted average interest rate 4.3 % 4.4 %
Interest cost was flat compared to the six months ended
Other Factors Affecting Earnings
Other expense was$31 million for the six months endedJune 30, 2022 , compared to other expense of$7 million for the six months endedJune 30, 2021 . Other expense during the six months endedJune 30, 2022 , was primarily attributable to$37 million of foreign currency transaction losses driven byU.S. dollar denominated debt held by SCL, partially offset by$6 million of foreign currency transaction gains driven bySingapore dollar denominated intercompany debt reported inU.S. dollars. Our income tax expense was$112 million on a loss before income taxes of$780 million for the six months endedJune 30, 2022 , resulting in a 14.4% effective income tax rate. This compares to a 1.4% effective income tax rate for the six months endedJune 30, 2021 . The income tax expense for the six months endedJune 30, 2022 , reflects a 17% statutory tax rate on ourSingapore operations, a 21% corporate income tax on our domestic operations and a zero percent tax rate on ourMacao gaming operations due to our income tax exemption inMacao . OurU.S. operations recorded tax benefits associated with the pre-tax book losses, primarily related toU.S. corporate and interest expense incurred during the six months endedJune 30, 2022 . Our income tax expense is based on the Company's estimated annual effective tax rate for the year applied to year-to-date operating results in accordance with interim accounting guidance. The net loss attributable to our noncontrolling interests was$228 million for the six months endedJune 30, 2022 , compared to$114 million for the six months endedJune 30, 2021 . These amounts were primarily related to the noncontrolling interest of SCL.
Additional Information Regarding our Retail Mall Operations
We own and operate retail malls at ourIntegrated Resorts at The Venetian Macao, ThePlaza Macao and Four Seasons Macao, The Londoner Macao, The Parisian Macao andMarina Bay Sands . Management believes being in the retail mall business and, specifically, owning some of the largest retail properties inAsia will provide meaningful value for us, particularly as the retail market inAsia continues to grow.
Our malls are designed to complement our other unique amenities and service
offerings provided by our
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The following tables summarize the results of our mall operations on the Cotai Strip and at Marina Bay Sands for the three and six months endedJune 30, 2022 and 2021: Shoppes at Shoppes at Four Shoppes at Shoppes at The Shoppes at Marina Venetian Seasons Londoner Parisian Bay Sands (In millions) For the three months endedJune 30, 2022 Mall revenues: Minimum rents(1)$ 44 $ 31 $ 8 $ 7 $ 36 Overage rents - 1 2 - 9 Rent concessions(2) (11) (1) - (2) 2 Total overage rents and rent concessions (11) - 2 (2) 11 CAM, levies and direct recoveries 8 2 2 2 8 Total mall revenues 41 33 12 7 55 Mall operating expenses: Common area maintenance 3 1 2 1 5 Marketing and other direct operating expenses 2 1 1 1 2 Mall operating expenses 5 2 3 2 7 Property taxes(4) 1 - - - 1 Mall-related expenses(5) $ 6 $ 2 $ 3 $ 2 $ 8 For the three months endedJune 30, 2021 Mall revenues: Minimum rents(1)$ 45 $ 30 $ 6 $ 7 $ 35 Overage rents 4 2 6 1 4 Rent concessions(2) (8) (1) - (1) (7) Total overage rents and rent concessions (4) 1 6 - (3) CAM, levies and direct recoveries 8 3 3 3 7 Total mall revenues 49 34 15 10 39 Mall operating expenses: Common area maintenance 3 2 3 1 4 Marketing and other direct operating expenses 2 - - 1 1 Mall operating expenses 5 2 3 2 5 Property taxes(4) - - - - 1 Provision for credit losses - - - 3 - Mall-related expenses(5) $ 5 $ 2 $ 3 $ 5 $ 6 For the six months endedJune 30, 2022 Mall revenues: Minimum rents(1)$ 88 $ 61 $ 15 $ 13 $ 73 Overage rents 1 2 6 1 16 Rent concessions(2) (19) (1) (1) (3) - Total overage rents and rent concessions (18) 1 5 (2) 16 CAM, levies and direct recoveries 15 5 6 4 15 Total mall revenues 85 67 26 15 104 Mall operating expenses: Common area maintenance 6 2 3 2 9 Marketing and other direct operating expenses 4 3 2 2 3 Mall operating expenses 10 5 5 4 12 Property taxes(4) 1 - - - 2 Mall-related expenses(5)$ 11 $ 5 $ 5 $ 4 $ 14 51
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Shoppes at
Shoppes at Four Shoppes at Shoppes at The Shoppes at Marina
Venetian Seasons Londoner Parisian Bay Sands
(In millions)
For the six months ended June 30, 2021
Mall revenues:
Minimum rents(1) $ 91 $ 61 $ 14 $ 16 $ 72
Overage rents 6 8 10 2 8
Rent concessions(2) (17) (1) (2) (3) (13)
Other(3) - - - - 6
Total overage rents, rent concessions
and other (11) 7 8 (1) 1
CAM, levies and direct recoveries 15 5 7 5 13
Total mall revenues 95 73 29 20 86
Mall operating expenses:
Common area maintenance 6 3 4 2 8
Marketing and other direct operating
expenses 3 1 1 1 3
Mall operating expenses 9 4 5 3 11
Property taxes(4) 1 - - - 3
Provision for (recovery of) credit
losses (1) - - 3 -
Mall-related expenses(5) $ 9 $ 4 $ 5 $ 6 $ 14
____________________
Note: These tables exclude the results of our mall operations at Sands Macao.
(1)Minimum rents include base rents and straight-line adjustments of base rents.
(2)Rent concessions were provided to tenants as a result of the COVID-19 Pandemic and the impact on mall operations.
(3)The amount for
(4)Commercial property that generates rental income is exempt from property tax for the first six years for newly constructed buildings in Cotai. If the property also qualifies for Tourism Utility Status, the property tax exemption can be extended to twelve years with effect from opening of the property. To date, The Venetian Macao, ThePlaza Macao and Four Seasons Macao, The LondonerMacao and The Parisian Macao have obtained an extended exemption. The exemption for The Venetian Macao and ThePlaza Macao and Four Seasons Macao expired inAugust 2019 andAugust 2020 , respectively, and the exemption for The LondonerMacao and The Parisian Macao will be expiring inDecember 2027 andSeptember 2028 , respectively.
(5)Mall-related expenses consist of CAM, marketing fees and other direct operating expenses, property taxes and provision for credit losses, but excludes depreciation and amortization and general and administrative costs.
It is common in the mall operating industry for companies to disclose mall net
operating income ("NOI") as a useful supplemental measure of a mall's operating
performance. Because NOI excludes general and administrative expenses, interest
expense, impairment losses, depreciation and amortization, gains and losses from
property dispositions, allocations to noncontrolling interests and provision for
income taxes, it provides a performance measure that, when compared year over
year, reflects the revenues and expenses directly associated with owning and
operating commercial real estate properties and the impact on operations from
trends in occupancy rates, rental rates and operating costs.
In the tables above, we believe taking total mall revenues less mall-related
expenses provides an operating performance measure for our malls. Other mall
operating companies may use different methodologies for deriving mall-related
expenses. As such, this calculation may not be comparable to the NOI of other
mall operating companies.
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Development Projects
We regularly evaluate opportunities to improve our product offerings, such as
refreshing our meeting and convention facilities, suites and rooms, retail
malls, restaurant and nightlife mix and our gaming areas, as well as other
anticipated revenue-generating additions to our
The Londoner Macao is the result of our renovation, expansion and rebranding of Sands Cotai Central, which included the addition of extensive thematic elements both externally and internally. The Londoner Macao presents a range of new attractions and features, including some ofLondon's most recognizable landmarks, such as the Houses ofParliament and theElizabeth Tower (commonly known as "Big Ben"), and interactive guest experiences.The Integrated Resort featuresThe Londoner Macao Hotel with 594 London-themed suites, including 14 exclusive Suites byDavid Beckham , Londoner Court with approximately 370 luxury suites and the 6,000-seatLondoner Arena .The Londoner Arena and the expansion of the Shoppes at Londoner have been completed during the first half of 2022. We anticipate the total costs associated with The Londoner Macao development project described above and the completed The Grand Suites at Four Seasons to be approximately$2.20 billion , of which$2.11 billion was spent as ofJune 30, 2022 . We expect to fund our developments through a combination of cash on hand, borrowings from the 2018 SCL Credit Facility and surplus from operating cash flows.Singapore InApril 2019 , our wholly owned subsidiary,Marina Bay Sands Pte. Ltd. ("MBS") and theSingapore Tourism Board (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 approximately 1,000 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 project cost of approximatelySGD 4.50 billion (approximately$3.23 billion at exchange rates in effect onJune 30, 2022 ), which investment must be completed within eight years from the effective date of the agreement. OnMarch 30, 2022 , MBS and the STB entered into a letter agreement (the "Letter Agreement") that amends the Second Development Agreement. The Letter Agreement extended the deadline for MBS to commence construction, as defined in the Second Development Agreement, by one year toApril 8, 2023 . The amount of the total project cost will be finalized as we complete design and development and begin construction. We amended our 2012 Singapore Credit Facility to provide for the financing of the development and construction costs, fees and other expenses related to theMBS Expansion Project pursuant to theSecond Development Agreement. OnSeptember 7, 2021 , we amended the 2012 Singapore Credit Facility, which, among other things, extended the deadline for delivering the construction cost estimate and the construction schedule for theMBS Expansion Project toMarch 31, 2022 . We are 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 extended deadline, and we will not be permitted to make further draws on the Singapore Delayed Draw Term Facility until these items are delivered. We do not anticipate material spend related to theMBS Expansion Project prior to the delivery of these items to lenders. We also began the approximately$1.0 billion renovation of Marina Bay Sands, which is expected to introduce world-class suites in Tower 1 and Tower 2, and substantially upgrade the overall guest experience for premium customers. This project is in addition to our previously announced plans for theMBS Expansion Project . Other
We continue to evaluate additional development projects in each of our markets and pursue new development opportunities globally.
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