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 (the "LasVegas Sale "). 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 nine months endedSeptember 30, 2022 . COVID-19 Pandemic Update Visitation to theMacao Special Administrative Region ("Macao") ofthe People's Republic of China ("China") remains substantially below pre-COVID-19 levels as a result of various government policies limiting or discouraging travel. Currently, visitors from mainlandChina in general may enterMacao without having to 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. OnAugust 30, 2022 , theHealth Bureau announced that fromSeptember 1, 2022 , individuals from 41 foreign countries will be allowed to enterMacao without prior authorization but will still be required to undergo a seven-day hotel quarantine. 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 inmid-June 2022 , theMacao government announced a series of preventative measures ("State of Immediate Prevention"). Those 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 were required to implement various levels of access control. In addition to the health safeguards already in place, theMacao government implemented a series of mass nucleic acid tests ("NAT") and rapid antigen tests for the general population. OnJuly 9, 2022 , theMacao government ordered casinos and all non-essential businesses to close fromJuly 11 to July 18 in an attempt to control an outbreak of COVID-19 inMacao , which was extended throughJuly 22, 2022 . OnJuly 20, 2022 , theMacao government announced a consolidation period, which would start onJuly 23, 2022 and end onJuly 30, 2022 whereby certain business activities would 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. OnAugust 2, 2022 , the State of Immediate Prevention was lifted andMacao entered a stabilization period untilAugust 7, 2022 , which allowed for the reopening of various public and social facilities and the resumption of restaurant dine-in services subject to the need to wear facemasks and present a negative NAT conducted within the past three days. OnAugust 6, 2022 , the quarantine period for fully-vaccinated visitors fromHong Kong ,Taiwan and other overseas jurisdictions changed from "10+7" (10 days of hotel quarantine plus 7 days of self-health management) to "7+3" (7 days of hotel quarantine plus 3 days of self-health management). Restrictions on the number of casino staff working were lifted onAugust 15, 2022 . Throughout August, various restrictions on movement betweenMacao and Zhuhai were progressively lifted by both theMacao and mainlandChina governments. 31
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OnSeptember 19, 2022 , the NAT requirement was extended from within 24 hours of travel to 48 hours for those travelers entering Zhuhai fromMacao and onSeptember 21, 2022 , the NAT requirement was extended from within 48 hours of travel to seven days for those travelers entering mainlandChina fromMacao by plane. OurMacao gaming operations remained open during the nine months endedSeptember 30, 2022 , with the exception of the casino closure inJuly 2022 mentioned above. Guest visitation to the properties, however, was adversely affected during this period due to the various outbreaks that occurred inShanghai ,Hong Kong ,Guangdong andMacao , which resulted in tighter travel restrictions. 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 nine months endedSeptember 30, 2022 and in June and July in particular, we provided both towers of the Sheraton GrandMacao hotel and also The Parisian Macao hotel to theMacao government to house individuals for quarantine and medical observation purposes. The Parisian Macao hotel ceased operations as a medical observation facility onJuly 27, 2022 , and the Sheraton Grand Macao hotel ceased operations as a quarantine and medical observation facility onSeptember 23, 2022 . 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 25.0% and 81.7%, during the nine months endedSeptember 30, 2022 , as compared to the same period in 2021 and 2019 (pre-pandemic), respectively. TheMacao government also announced gross gaming revenue decreased approximately 53.1% and 85.6%, during the nine months endedSeptember 30, 2022 , as compared to the same period in 2021 and 2019, respectively. InSingapore , 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, 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 , if any, 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 increased since restrictions have been lifted. TheSingapore Tourism Board ("STB") announced total visitation toSingapore increased from approximately 172,000 in 2021 to 3.7 million in 2022 on a year-to-date basis, while visitation decreased 74.1% when compared to the same period in 2019. For the three months endedSeptember 30, 2022 , visitation decreased 55.9% 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 3.3 million inAugust 2022 , up from approximately 2.9 million inJune 2022 , and is at 56% 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 some operating at reduced levels due to lower visitation and required safety measures in place as described above during the nine months endedSeptember 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. 32
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We have a strong balance sheet and sufficient liquidity in place, including total unrestricted cash and cash equivalents of$5.84 billion and access to$1.50 billion ,$1.04 billion and$412 million of available borrowing capacity from our LVSC Revolving Facility, 2018 SCL Revolving Facility and 2012 Singapore Revolving Facility, respectively, as ofSeptember 30, 2022 . We believe we are able to support continuing operations, complete the major construction projects that are underway, proceed with theMacao concession tendering process and respond to the current COVID-19 Pandemic challenges. We have taken various 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 at the time of the transaction) and provided a bank guarantee onSeptember 20, 2022 of2.31 billion patacas (approximately$289 million at exchange rates as defined in the bank guarantee contract) 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 maximum 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$618 million at exchange rates in effect onSeptember 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 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. OnJuly 27, 2022 , theMacao government officially launched the public tender process for the award of concessions for the operation of games of chance in casinos. VML submitted its bid for one of up to six gaming concessions onSeptember 14, 2022 . All bids received by theMacao government, of which there were a total of seven companies, including VML, were formally accepted in the tender. TheMacao government has disclosed that it intends to complete the tender process and grant the new gaming concessions before the end of 2022.
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 the
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
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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. The subconcession not being further extended or not obtaining a new gaming concession when our current subconcession expires 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 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.
Inflation Reduction Act
The Inflation Reduction Act ("IRA") of 2022 was signed into law on August 16,
2022 . The IRA contains numerous provisions including a 15% corporate alternative
minimum tax ("CAMT") for certain large corporations that have at least an
average of $1 billion adjusted financial statement income over a consecutive
three-year period effective in tax years beginning after December 31, 2022 .
Applicable corporations would be allowed to claim a credit for the corporate
minimum tax paid against regular tax in future years. The IRA also includes a 1%
excise tax on corporate stock repurchases beginning January 1, 2023 . The CAMT
could impact our future cash flows and results of operations. The Internal
Revenue Service has been granted broad authority to issue regulations or other
guidance that could clarify how these taxes will be applied. We will continue to
evaluate the impact of the IRA as additional information becomes available.
Marina Bay Sands Gaming License
In
Intercompany Loan Agreement with SCL
OnJuly 11, 2022 , we entered into an intercompany term loan agreement with SCL, a related party, in the amount of$1.0 billion , which is repayable onJuly 11, 2028 . In the first two years fromJuly 11, 2022 , SCL will have the option to elect to pay cash interest at 5% per annum or payment-in-kind interest at 6% per annum by adding the amount of such interest to the then-outstanding principal amount of the loan, following which only cash interest at 5% per annum will be payable. This loan is unsecured, subordinated to all third party unsecured indebtedness and other obligations of SCL and its subsidiaries and is eliminated in consolidation.
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 nine
months ended
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."
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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 , are dependent upon the volume of patrons who 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 patrons who 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 3.15% to 3.45% inMacao andSingapore , and our Non-Rolling Chip table games have produced a trailing 12-month win percentage of 25.6%, 22.5%, 24.0%, 26.1%, 18.6% and 17.1% 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%, 3.8%, 7.7%, 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 , 11.3% and 14.8%, respectively, of our table games play was conducted on a credit basis for the nine months endedSeptember 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 35
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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
The reopening of borders and elimination of most pandemic-related restrictions inSingapore positively impacted the financial results ofMarina Bay Sands . Net revenues and adjusted property EBITDA at Marina Bay Sands increased$508 million and$328 million , respectively. In contrast, net revenues and adjusted property EBITDA at ourMacao operations decreased$360 million and$184 million , respectively, driven by a COVID-19 outbreak inMacao that resulted in a temporary government mandated closure of all casinos and non-essential businesses, as well as a series of various preventative measures that impacted visitation to ourMacao operations. See "COVID-19 Pandemic" for further information. Net revenues for the three months endedSeptember 30, 2022 , were$1.01 billion , compared to$857 million for the three months endedSeptember 30, 2021 . Operating loss was$177 million for the three months endedSeptember 30, 2022 , compared to$316 million for the three months endedSeptember 30, 2021 . Net loss from continuing operations was$380 million for the three months endedSeptember 30, 2022 , compared to$594 million for the three months endedSeptember 30, 2021 . 36
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Operating Revenues
Our net revenues consisted of the following:
Three Months Ended September 30,
Percent
2022 2021 Change
(Dollars in millions)
Casino $ 637 $ 533 19.5 %
Rooms 123 100 23.0 %
Food and beverage 82 42 95.2 %
Mall 119 165 (27.9) %
Convention, retail and other 44 17 158.8 %
Total net revenues $ 1,005 $ 857 17.3 %
Consolidated net revenues were $1.01 billion for the three months ended
September 30, 2022 , an increase of $148 million compared to $857 million for the
three months ended September 30, 2021 . The increase is due to a $508 million
increase at Marina Bay Sands, partially offset by a $360 million decrease at our
Macao operations.
Net casino revenues increased $104 million compared to the three months ended
September 30, 2021 . Casino revenues at Marina Bay Sands increased $368 million
due to increases in Rolling Chip volume, Non-Rolling Chip drop and slot handle
driven by an increase in play due to the reopening of borders and elimination of
most pandemic-related restrictions. This increase was partially offset by a
$264 million decrease at our Macao operations due to closures mandated by the
Macao government that resulted in decreased visitation and table games and slot
volumes. The following table summarizes the results of our casino activity:
Three Months Ended September 30,
2022 2021 Change
(Dollars in millions)
Macao Operations:
The Venetian Macao
Total net casino revenues $ 60 $ 176 (65.9) %
Non-Rolling Chip drop $ 292 $ 632 (53.8) %
Non-Rolling Chip win percentage 24.3 % 27.9 % (3.6) pts
Rolling Chip volume $ 115 $ 781 (85.3) %
Rolling Chip win percentage 1.70 % 2.22 % (0.52) pts
Slot handle $ 158 $ 362 (56.4) %
Slot hold percentage 4.0 % 3.8 % 0.2 pts
The Londoner Macao
Total net casino revenues $ 24 $ 80 (70.0) %
Non-Rolling Chip drop $ 116 $ 388 (70.1) %
Non-Rolling Chip win percentage 20.2 % 20.5 % (0.3) pts
Rolling Chip volume $ 179 $ 1,266 (85.9) %
Rolling Chip win percentage 5.27 % 2.04 % 3.23 pts
Slot handle $ 104 $ 225 (53.8) %
Slot hold percentage 4.0 % 3.8 % 0.2 pts
The Parisian Macao
Total net casino revenues $ 8 $ 75 (89.3) %
Non-Rolling Chip drop $ 60 $ 246 (75.6) %
Non-Rolling Chip win percentage 24.1 % 22.8 % 1.3 pts
Rolling Chip volume $ 26 $ 175 (85.1) %
Rolling Chip win percentage (14.10) % 16.12 % (30.22) pts
Slot handle $ 34 $ 153 (77.8) %
Slot hold percentage 4.4 % 3.1 % 1.3 pts
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Three Months Ended
2022 2021 Change
(Dollars in millions)
The Plaza Macao and Four Seasons Macao
Total net casino revenues $ 27 $ 44 (38.6) %
Non-Rolling Chip drop $ 90 $ 269 (66.5) %
Non-Rolling Chip win percentage 17.6 % 20.0 % (2.4) pts
Rolling Chip volume $ 212 $ 308 (31.2) %
Rolling Chip win percentage 9.37 % 2.40 % 6.97 pts
Slot handle $ 4 $ 7 (42.9) %
Slot hold percentage 14.4 % 9.7 % 4.7 pts
Sands Macao
Total net casino revenues $ 8 $ 16 (50.0) %
Non-Rolling Chip drop $ 47 $ 89 (47.2) %
Non-Rolling Chip win percentage 16.5 % 17.4 % (0.9) pts
Rolling Chip volume $ 16 $ 137 (88.3) %
Rolling Chip win percentage 2.98 % 0.11 % 2.87 pts
Slot handle $ 72 $ 147 (51.0) %
Slot hold percentage 3.4 % 3.4 % - pts
Singapore Operations:
Marina Bay Sands
Total net casino revenues $ 510 $ 142 259.2 %
Non-Rolling Chip drop $ 1,258 $ 638 97.2 %
Non-Rolling Chip win percentage 18.6 % 11.7 % 6.9 pts
Rolling Chip volume $ 6,837 $ 459 1,389.5 %
Rolling Chip win percentage 3.47 % 4.05 % (0.58) pts
Slot handle $ 4,424 $ 2,299 92.4 %
Slot hold percentage 4.3 % 4.2 % 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 increased$23 million compared to the three months endedSeptember 30, 2021 . The increase was due to increased occupancy rates and ADR driven by increased visitation at Marina Bay Sands compared to the three months endedSeptember 30, 2021 . This increase was partially offset by a decrease at ourMacao operations as visitation decreased driven by mandated government closures described above resulting in lower occupancy rates. The following table summarizes the results of our room activity:
Three Months Ended
2022 2021 Change
(Room revenues in millions)
Macao Operations:
The Venetian Macao
Total room revenues $ 10 $ 18 (44.4) %
Occupancy rate 36.7 % 48.4 % (11.7) pts
Average daily room rate (ADR) $ 135 $ 149 (9.4) %
Revenue per available room (RevPAR) $ 50 $ 72 (30.6) %
The Londoner Macao
Total room revenues $ 10 $ 22 (54.5) %
Occupancy rate 23.2 % 38.8 % (15.6) pts
Average daily room rate (ADR) $ 159 $ 155 2.6 %
Revenue per available room (RevPAR) $ 37 $ 60 (38.3) %
The Parisian Macao
Total room revenues $ 5 $ 12 (58.3) %
Occupancy rate 37.1 % 52.5 % (15.4) pts
Average daily room rate (ADR) $ 98 $ 116 (15.5) %
Revenue per available room (RevPAR) $ 36 $ 61 (41.0) %
The Plaza Macao and Four Seasons Macao
Total room revenues $ 5 $ 11 (54.5) %
Occupancy rate 19.8 % 41.3 % (21.5) pts
Average daily room rate (ADR) $ 453 $ 439 3.2 %
Revenue per available room (RevPAR) $ 90 $ 181 (50.3) %
Sands Macao
Total room revenues $ 1 $ 2 (50.0) %
Occupancy rate 43.8 % 63.2 % (19.4) pts
Average daily room rate (ADR) $ 157 $ 134 17.2 %
Revenue per available room (RevPAR) $ 69 $ 85 (18.8) %
Singapore Operations:
Marina Bay Sands(1)
Total room revenues $ 92 $ 35 162.9 %
Occupancy rate 96.0 % 71.7 % 24.3 pts
Average daily room rate (ADR) $ 515 $ 235 119.1 %
Revenue per available room (RevPAR) $ 494 $ 169 192.3 %
__________________________
(1) During the three months ended
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Food and beverage revenues increased$40 million compared to the three months endedSeptember 30, 2021 . The increase was due to a$50 million increase at Marina Bay Sands driven by higher business volume at food and beverage outlets as a result of larger group sizes, elimination of most pandemic-related restrictions and the opening of new venues during the last twelve months. This increase was partially offset by a$10 million decrease at ourMacao operations due to lower business volume at banquet operations and at most food and beverage outlets. Mall revenues decreased$46 million compared to the three months endedSeptember 30, 2021 . A$60 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, was partially offset by a$14 million increase in mall revenues at Marina Bay Sands, driven by a decrease in rent concessions granted to our mall tenants and an increase in turnover rent. 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
2022 2021 Change
(Mall revenues in millions)
Macao Operations:
Shoppes at Venetian
Total mall revenues $ 26 $ 49 (46.9) %
Mall gross leasable area (in square feet) 814,771 814,731 - %
Occupancy 79.1 % 78.7 % 0.4 pts
Base rent per square foot $ 286 $ 296 (3.4) %
Tenant sales per square foot(1) $ 1,021 $ 1,368 (25.4) %
Shoppes at Londoner
Total mall revenues $ 9 $ 13 (30.8) %
Mall gross leasable area (in square feet) 605,461 520,302 16.4 %
Occupancy 54.9 % 60.4 % (5.5) pts
Base rent per square foot $ 136 $ 138 (1.4) %
Tenant sales per square foot(1) $ 1,112 $ 1,240 (10.3) %
Shoppes at Parisian
Total mall revenues $ 5 $ 10 (50.0) %
Mall gross leasable area (in square feet) 296,322 296,322 - %
Occupancy 73.8 % 76.7 % (2.9) pts
Base rent per square foot $ 121 $ 146 (17.1) %
Tenant sales per square foot(1) $ 376 $ 683 (44.9) %
Shoppes at Four Seasons
Total mall revenues $ 23 $ 52 (55.8) %
Mall gross leasable area (in square feet) 248,674 244,193 1.8 %
Occupancy 94.4 % 94.3 % 0.1 pts
Base rent per square foot $ 542 $ 550 (1.5) %
Tenant sales per square foot(1) $ 4,301 $ 6,298 (31.7) %
Singapore Operations:
The Shoppes at Marina Bay Sands
Total mall revenues $ 55 $ 41 34.1 %
Mall gross leasable area (in square feet) 622,007 622,073 - %
Occupancy 99.8 % 97.5 % 2.3 pts
Base rent per square foot $ 283 $ 265 6.8 %
Tenant sales per square foot(1) $ 2,359 $ 1,480 59.4 %
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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 endedSeptember 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$27 million compared to the three months endedSeptember 30, 2021 . This increase was due to an$19 million increase at Marina Bay Sands, primarily driven by an$11 million increase in convention revenue. In addition, a$8 million increase at ourMacao operations was driven primarily by quarantine room revenue at the Sheraton Grand Macao hotel and The Parisian Macao.
Operating Expenses
Our operating expenses consisted of the following:
Three Months Ended
Percent
2022 2021 Change
(Dollars in millions)
Casino $ 410 $ 451 (9.1) %
Rooms 41 40 2.5 %
Food and beverage 83 55 50.9 %
Mall 16 17 (5.9) %
Convention, retail and other 27 21 28.6 %
Provision for credit losses 8 3 166.7 %
General and administrative 238 223 6.7 %
Corporate 53 64 (17.2) %
Pre-opening 4 6 (33.3) %
Development 26 13 100.0 %
Depreciation and amortization 260 262 (0.8) %
Amortization of leasehold interests in land 14 14 - %
Loss on disposal or impairment of assets 2 4 (50.0) %
Total operating expenses $ 1,182 $ 1,173 0.8 %
Operating expenses were $1.18 billion for the three months ended September 30,
2022 , an increase of $9 million compared to $1.17 billion for the three months
ended September 30, 2021 , primarily driven by increases of $28 million in food
and beverage expenses, $15 million in general and administrative expenses, $13
million in development expenses and $6 million increase in convention, retail,
and other, partially offset by decreases of $41 million in casino expenses and
$11 million in corporate expenses.
Casino expenses decreased $41 million compared to the three months ended
September 30, 2021 . The decrease was primarily attributable to a $124 million
decrease in gaming taxes at our Macao operations due to decreased revenues,
partially offset by an $87 million increase in gaming taxes at Marina Bay Sands
due to increased revenues. The $264 million decrease in casino revenue at our
Macao operating properties is subject to a 39% tax rate, whereas the
$368 million increase in casino revenue at Marina Bay Sands is subject to a
lower tax rate.
Food and beverage expenses increased $28 million compared to the three months
ended September 30, 2021 . An increase of $33 million at Marina Bay Sands was due
to increased food outlet and banquet volumes, partially offset by a $5 million
decrease at our Macao operations due to lower business volume.
Convention, retail and other expenses increased $6 million compared to the three
months ended September 30, 2021 , primarily driven by a $7 million increase at
Marina Bay Sands, partially offset by a $1 million decrease at our Macao
operations.
Provision for credit losses was $8 million for three months ended September 30,
2022 , compared to $3 million for the three months ended September 30, 2021 . The
$5 million increase was driven by increased provision for the aging of patron
receivables at our Marina Bay Sands and Macao operations. The amount of this
provision can vary
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over short periods of time because of factors specific to the patrons who owe us money from gaming activities. We believe the amount of our provision for credit losses in the future will depend upon the state of the economy, our credit standards, our risk assessments and the judgment of our employees responsible for granting credit. General and administrative expenses increased$15 million compared to the three months endedSeptember 30, 2021 . The increase was primarily due to a$22 million increase at Marina Bay Sands, driven by an increase in payroll, marketing and property operation costs, partially offset by a$7 million decrease at ourMacao operations, driven by a decrease in marketing, property tax and insurance costs.
Corporate expenses decreased
Development expenses were$26 million for the three months endedSeptember 30, 2022 , compared to$13 million for the three months endedSeptember 30, 2021 . During the three months endedSeptember 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. Loss on disposal or impairment of assets was$2 million for three months endedSeptember 30, 2022 , compared to$4 million for the three months endedSeptember 30, 2021 . The losses incurred for the three months endedSeptember 30, 2022 were primarily due to room renovation at Marina Bay Sands. The losses incurred for the three months endedSeptember 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 September 30,
Percent
2022 2021 Change
(Dollars in millions)
Macao:
The Venetian Macao $ (37) $ 40 (192.5) %
The Londoner Macao (60) (33) 81.8 %
The Parisian Macao (37) 5 (840.0) %
The Plaza Macao and Four Seasons Macao 6 42 (85.7) %
Sands Macao (22) (21) 4.8 %
Ferry Operations and Other (2) (1) 100.0 %
(152) 32 (575.0) %
Marina Bay Sands 343 15 2,186.7 %
Consolidated adjusted property EBITDA(1) $ 191 $ 47 306.4 %
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__________________________
(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. Three
Months Ended
2022 2021
(In millions)
Consolidated adjusted property EBITDA $ 191 $ 47
Other Operating Costs and Expenses
Stock-based compensation(a) (9) -
Corporate (53) (64)
Pre-opening (4) (6)
Development (26) (13)
Depreciation and amortization (260) (262)
Amortization of leasehold interests in land (14) (14)
Loss on disposal or impairment of assets (2) (4)
Operating loss (177) (316)
Other Non-Operating Costs and Expenses
Interest income 38 1
Interest expense, net of amounts capitalized (183) (157)
Other income (expense) 2 (12)
Loss on modification or early retirement of debt - (137)
Income tax (expense) benefit (60) 27
Net loss from continuing operations $
(380)
(a)During the three months ended
Adjusted property EBITDA at ourMacao operations decreased$184 million compared with the three months endedSeptember 30, 2021 , primarily due to decreases in casino, room, food and beverage and mall revenues due to decreased visitation at ourMacao properties driven by government mandated closures as described above. Adjusted property EBITDA at Marina Bay Sands increased$328 million compared to the three months endedSeptember 30, 2021 , primarily due to increases in casino, room, food and beverage and mall revenues due to the reopening of borders and elimination of most pandemic-related restrictions. 43
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Interest Expense
The following table summarizes information related to interest expense:
Three Months Ended September 30,
2022 2021
(Dollars in millions)
Interest cost $ 184 $ 160
Less - capitalized interest (1) (3)
Interest expense, net $ 183 $ 157
Weighted average total debt balance $ 15,491 $ 14,574
Weighted average interest rate 4.8 % 4.4 %
Interest cost increased$24 million compared to the three months endedSeptember 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 endedSeptember 30, 2022 . The weighted average interest rate increased from 4.4% to 4.8% during the three months endedSeptember 30, 2022 when compared to the three months endedSeptember 30, 2021 , primarily driven by the increase in the underlying benchmark rate on our Singapore Credit Facility and the increase in interest rates on the SCL senior notes as a result of the credit rating downgrade to BB+ by S&P inFebruary 2022 , and by Fitch inJune 2022 ., offset by the extinguishment of the SCL 4.600% senior notes in Q3 2021.
Other Factors Affecting Earnings
Interest income was$38 million for the three months endedSeptember 30, 2022 , compared to$1 million for the three months endedSeptember 30, 2021 . Interest income during the three months endedSeptember 30, 2022 was primarily attributed to$29 million in interest income on money market funds and bank deposits driven by an increase in cash due to the sale of theLas Vegas Operating Properties and higher interest rates. We also had$8 million in interest income on the seller financing loan provided in connection with the sale of theLas Vegas Operating Properties in 2022. Other income was$2 million for the three months endedSeptember 30, 2022 , compared to other expense of$12 million for the three months endedSeptember 30, 2021 . Other income during the three months endedSeptember 30, 2022 , was primarily attributable to foreign currency transaction gains driven bySingapore dollar denominated debt reported inU.S. dollars. Our income tax expense was$60 million on a loss before income taxes of$320 million for the three months endedSeptember 30, 2022 , resulting in an 18.8% effective income tax rate. This compares to a (4.3)% effective income tax rate for the three months endedSeptember 30, 2021 . The income tax expense for the three months endedSeptember 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 throughDecember 31, 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 guidelines.
The net loss attributable to our noncontrolling interests was
Nine Months Ended
Summary Financial Results The reopening of borders and elimination of most pandemic-related restrictions inSingapore positively impacted the financial results ofMarina Bay Sands . Net revenues and adjusted property EBITDA at Marina Bay Sands increased$834 million and$512 million , respectively. In contrast, net revenues and adjusted property EBITDA at ourMacao operations decreased$1.07 billion and$537 million , respectively, as tighter border 44
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restrictions were introduced as a result of increased positive COVID-19 cases in
Net revenues for the nine months endedSeptember 30, 2022 , were$2.99 billion , compared to$3.23 billion for the nine months endedSeptember 30, 2021 . Operating loss was$626 million for the nine months endedSeptember 30, 2022 , compared to$551 million for the nine months endedSeptember 30, 2021 . Net loss from continuing operations was$1.27 billion for the nine months endedSeptember 30, 2022 , compared to$1.15 billion for the nine months endedSeptember 30, 2021 .
Operating Revenues
Our net revenues consisted of the following:
Nine Months Ended September 30,
Percent
2022 2021 Change
(Dollars in millions)
Casino $ 1,973 $ 2,241 (12.0) %
Rooms 315 311 1.3 %
Food and beverage 198 148 33.8 %
Mall 416 469 (11.3) %
Convention, retail and other 91 57 59.6 %
Total net revenues $ 2,993 $ 3,226 (7.2) %
Consolidated net revenues were $2.99 billion for the nine months ended September
30, 2022 , a decrease of $233 million compared to $3.23 billion for the nine
months ended September 30, 2021 , due to a decrease of $1.07 billion at our Macao
operations. The decrease at our Macao operations was due to decreased visitation
compared to the nine months ended September 30, 2021 , as tighter border
restrictions were introduced as a result of increased positive COVID-19 cases in
Macao and the surrounding region. The decrease was partially offset by an
$834 million increase at Marina Bay Sands primarily due to increased visitation
resulting from the reopening of borders and elimination of most pandemic-related
restrictions.
Net casino revenues decreased $268 million compared to the nine months ended
September 30, 2021 . The decrease was driven by an $878 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 by $610 million due to increased table games and slot volumes, driven
by the reopening of borders and elimination of most pandemic-related
restrictions. The following table summarizes the results of our casino activity:
Nine Months Ended September 30,
2022 2021 Change
(Dollars in millions)
Macao Operations:
The Venetian Macao
Total net casino revenues $ 308 $ 749 (58.9) %
Non-Rolling Chip drop $ 1,260 $ 2,539 (50.4) %
Non-Rolling Chip win percentage 25.1 % 27.6 % (2.5) pts
Rolling Chip volume $ 1,099 $ 3,522 (68.8) %
Rolling Chip win percentage 3.45 % 4.15 % (0.70) pts
Slot handle $ 835 $ 1,376 (39.3) %
Slot hold percentage 3.8 % 3.8 % - pts
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Nine Months Ended
2022 2021 Change
(Dollars in millions)
The Londoner Macao
Total net casino revenues $ 145 $ 304 (52.3) %
Non-Rolling Chip drop $ 645 $ 1,347 (52.1) %
Non-Rolling Chip win percentage 22.1 % 21.1 % 1.0 pts
Rolling Chip volume $ 770 $ 2,915 (73.6) %
Rolling Chip win percentage 4.74 % 3.39 % 1.35 pts
Slot handle $ 499 $ 709 (29.6) %
Slot hold percentage 3.6 % 3.8 % (0.2) pts
The Parisian Macao
Total net casino revenues $ 83 $ 203 (59.1) %
Non-Rolling Chip drop $ 331 $ 903 (63.3) %
Non-Rolling Chip win percentage 24.4 % 22.0 % 2.4 pts
Rolling Chip volume $ 235 $ 321 (26.8) %
Rolling Chip win percentage 6.78 % 8.53 % (1.75) pts
Slot handle $ 220 $ 620 (64.5) %
Slot hold percentage 3.8 % 3.1 % 0.7 pts
The Plaza Macao and Four Seasons Macao
Total net casino revenues $ 120 $ 233 (48.5) %
Non-Rolling Chip drop $ 406 $ 874 (53.5) %
Non-Rolling Chip win percentage 24.2 % 21.8 % 2.4 pts
Rolling Chip volume $ 1,275 $ 2,273 (43.9) %
Rolling Chip win percentage 4.92 % 5.10 % (0.18) pts
Slot handle $ 16 $ 29 (44.8) %
Slot hold percentage 9.7 % 5.9 % 3.8 pts
Sands Macao
Total net casino revenues $ 39 $ 84 (53.6) %
Non-Rolling Chip drop $ 181 $ 341 (46.9) %
Non-Rolling Chip win percentage 18.1 % 16.4 % 1.7 pts
Rolling Chip volume $ 163 $ 953 (82.9) %
Rolling Chip win percentage 4.49 % 4.49 % - pts
Slot handle $ 316 $ 466 (32.2) %
Slot hold percentage 3.1 % 3.4 % (0.3) pts
Singapore Operations:
Marina Bay Sands
Total net casino revenues $ 1,278 $ 668 91.3 %
Non-Rolling Chip drop $ 3,191 $ 1,865 71.1 %
Non-Rolling Chip win percentage 18.4 % 16.3 % 2.1 pts
Rolling Chip volume $ 14,130 $ 2,583 447.0 %
Rolling Chip win percentage 3.76 % 5.52 % (1.76) pts
Slot handle $ 11,797 $ 9,209 28.1 %
Slot hold percentage 4.3 % 4.2 % 0.1 pts
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Nine Months Ended September 30,
2022 2021 Change
(Dollars in millions)
U.S. Operations:
Las Vegas Operating Properties (1)
Total net casino revenues $ 61 $ 304 (79.9) %
Table games drop $ 257 $ 1,137 (77.4) %
Table games win percentage 13.6 % 16.0 % (2.4) pts
Slot handle $ 599 $ 2,683 (77.7) %
Slot hold percentage 8.2 % 8.5 % (0.3) pts
__________________________
(1)
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Room revenues increased $4 million compared to the nine months ended September
30, 2021 . The increase was primarily due to increased occupancy rates and ADR at
Marina Bay Sands driven by increased visitation, partially offset by decreased
occupancy rates and ADR driven by reduced visitation across our Macao
properties. The following table summarizes the results of our room activity:
Nine Months Ended September 30,
2022 2021 Change
(Room revenues in millions)
Macao Operations:
The Venetian Macao
Total room revenues $ 38 $ 61 (37.7) %
Occupancy rate 38.9 % 51.5 % (12.6) pts
Average daily room rate (ADR) $ 143 $ 155 (7.7) %
Revenue per available room (RevPAR) $ 56 $ 80 (30.0) %
The Londoner Macao
Total room revenues $ 43 $ 69 (37.7) %
Occupancy rate 25.7 % 39.9 % (14.2) pts
Average daily room rate (ADR) $ 149 $ 158 (5.7) %
Revenue per available room (RevPAR) $ 38 $ 63 (39.7) %
The Parisian Macao
Total room revenues $ 23 $ 41 (43.9) %
Occupancy rate 38.7 % 52.6 % (13.9) pts
Average daily room rate (ADR) $ 107 $ 118 (9.3) %
Revenue per available room (RevPAR) $ 41 $ 62 (33.9) %
The Plaza Macao and Four Seasons Macao
Total room revenues $ 20 $ 34 (41.2) %
Occupancy rate 26.3 % 44.5 % (18.2) pts
Average daily room rate (ADR) $ 435 $ 439 (0.9) %
Revenue per available room (RevPAR) $ 114 $ 195 (41.5) %
Sands Macao
Total room revenues $ 5 $ 7 (28.6) %
Occupancy rate 53.5 % 68.6 % (15.1) pts
Average daily room rate (ADR) $ 137 $ 138 (0.7) %
Revenue per available room (RevPAR) $ 74 $ 95 (22.1) %
Singapore Operations:
Marina Bay Sands(1)
Total room revenues $ 186 $ 99 87.9 %
Occupancy rate 91.3 % 67.4 % 23.9 pts
Average daily room rate (ADR) $ 375 $ 228 64.5 %
Revenue per available room (RevPAR) $ 343 $ 154 122.7 %
U.S. Operations:
Las Vegas Operating Properties (2)
Total room revenues $ 78 $ 294 (73.5) %
Occupancy rate 84.6 % 76.2 % 8.4 pts
Average daily room rate (ADR) $ 247 $ 209 18.2 %
Revenue per available room (RevPAR) $ 209 $ 160 30.6 %
__________________________
(1)During the nine months ended
(2)
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Food and beverage revenues increased$50 million compared to the nine months endedSeptember 30, 2021 . The increase was due to a$72 million increase driven by increased business volume at food and beverage outlets, including new outlets and the reopening of entertainment venues, at Marina Bay Sands, partially offset by a$22 million decrease at ourMacao operations. Mall revenues decreased$53 million compared to the nine months endedSeptember 30, 2021 . The decrease was primarily due to decreases of$67 million in total overage rent and rent concessions and$14 million in lower base rent at ourMacao operations, partially offset by increases of$27 million in total overage rent, rent concessions and other and$2 million in higher base rent at Marina Bay Sands. 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 :
Nine Months Ended September 30,(1)
2022 2021 Change
(Mall revenues in millions)
Macao Operations:
Shoppes at Venetian
Total mall revenues $ 111 $ 144 (22.9) %
Mall gross leasable area (in square feet) 814,771 814,731 - %
Occupancy 79.1 % 78.7 % 0.4 pts
Base rent per square foot $ 286 $ 296 (3.4) %
Tenant sales per square foot(2) $ 1,021 $ 1,368 (25.4) %
Shoppes at Londoner
Total mall revenues $ 35 $ 42 (16.7) %
Mall gross leasable area (in square feet) 605,461 520,302 16.4 %
Occupancy 54.9 % 60.4 % (5.5) pts
Base rent per square foot $ 136 $ 138 (1.4) %
Tenant sales per square foot(2) $ 1,112 $ 1,240 (10.3) %
Shoppes at Parisian
Total mall revenues $ 20 $ 30 (33.3) %
Mall gross leasable area (in square feet) 296,322 296,322 - %
Occupancy 73.8 % 76.7 % (2.9) pts
Base rent per square foot $ 121 $ 146 (17.1) %
Tenant sales per square foot(2) $ 376 $ 683 (44.9) %
Shoppes at Four Seasons
Total mall revenues $ 90 $ 125 (28.0) %
Mall gross leasable area (in square feet) 248,674 244,193 1.8 %
Occupancy 94.4 % 94.3 % 0.1 pts
Base rent per square foot $ 542 $ 550 (1.5) %
Tenant sales per square foot(2) $ 4,301 $ 6,298 (31.7) %
Singapore Operations:
The Shoppes at Marina Bay Sands
Total mall revenues $ 159 $ 127 25.2 %
Mall gross leasable area (in square feet) 622,007 622,073 - %
Occupancy 99.8 % 97.5 % 2.3 pts
Base rent per square foot $ 283 $ 265 6.8 %
Tenant sales per square foot(2) $ 2,359 $ 1,480 59.4 %
__________________________
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 nine months ended September 30, 2022 and 2021. Base rent per square foot
presented above excludes the impact of these rent concessions.
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(1) As GLA, occupancy, base rent per square foot and tenant sales per square foot are calculated as ofSeptember 30, 2022 and 2021, they are identical to the summary presented herein for the three months endedSeptember 30, 2022 and 2021, respectively. (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$34 million compared to the nine months endedSeptember 30, 2021 , due primarily to increases of$33 million and$1 million at Marina Bay Sands and ourMacao operations, respectively, driven primarily by an increase in convention revenue at Marina Bay Sands and quarantine room revenue at the Sheraton Grand Macao hotel and The ParisianMacao .
Operating Expenses
Our operating expenses consisted of the following:
Nine
Months Ended
Percent
2022 2021 Change
(Dollars in millions)
Casino $ 1,323 $ 1,603 (17.5) %
Rooms 125 124 0.8 %
Food and beverage 221 186 18.8 %
Mall 53 48 10.4 %
Convention, retail and other 73 62 17.7 %
Provision for credit losses 14 9 55.6 %
General and administrative 694 667 4.0 %
Corporate 167 169 (1.2) %
Pre-opening 11 15 (26.7) %
Development 108 59 83.1 %
Depreciation and amortization 780 775 0.6 %
Amortization of leasehold interests in land 42 42 - %
Loss on disposal or impairment of assets 8 18 (55.6) %
Total operating expenses $ 3,619 $ 3,777 (4.2) %
Operating expenses were $3.62 billion for the nine months ended September 30,
2022 , a decrease of $158 million compared to $3.78 billion for the nine months
ended September 30, 2021 . The decrease was primarily driven by a $280 million
decrease in casino expenses.
Casino expenses decreased $280 million compared to the nine months ended
September 30, 2021 . The decrease was primarily attributable to a decrease of
$270 million in gaming taxes. The $878 million decrease in casino revenue at our
Macao operating properties is subject to a 39% tax rate, whereas the $610
million increase in casino revenue at Marina Bay Sands is subject to a lower tax
rate.
Food and beverage expenses increased
Convention, retail and other expenses increased$11 million compared to the nine months endedSeptember 30, 2021 , primarily driven by a$13 million increase at Marina Bay Sands, partially offset by a$2 million decrease at ourMacao operations. Provision for credit losses was$14 million for nine months endedSeptember 30, 2022 , compared to$9 million for the nine months endedSeptember 30, 2021 . The$5 million increase was primarily driven by$7 million in increased provision for the aging of patron receivables at Marina Bay Sands, partially offset by a$2 million provision for deferred mall receivables at ourMacao operations recorded during the nine months endedSeptember 30, 2021 . The amount of this provision can vary over short periods of time because of factors specific to the patrons who owe us money from gaming activities. We believe the amount of our provision for credit losses in the future 50
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will depend upon the state of the economy, our credit standards, our risk assessments and the judgment of our employees responsible for granting credit.
General and administrative expenses increased$27 million compared to the nine months endedSeptember 30, 2021 . The increase was primarily due to an increase of$42 million at Marina Bay Sands, driven by increased marketing, payroll and property operations costs, partially offset by a decrease of$15 million at ourMacao operations, driven by decreased marketing and property tax and insurance costs. Development expenses were$108 million for the nine months endedSeptember 30, 2022 , compared to$59 million for the nine months endedSeptember 30, 2021 . During the nine months endedSeptember 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 was$8 million for the nine months endedSeptember 30, 2022 , compared to$18 million for the nine months endedSeptember 30, 2021 . The losses incurred for the nine months endedSeptember 30, 2022 were primarily due to$4 million in asset disposals related to aircraft parts and$3 million in asset disposal and demolition costs, primarily at The Londoner Macao, The Venetian Macao, Sands Macao and our Corporate offices. The losses incurred for the nine months endedSeptember 30, 2021 were primarily due to asset disposals and demolition costs related to The Londoner Macao. 51
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Segment Adjusted Property EBITDA
The following table summarizes information related to our segments:
Nine Months Ended
Percent
2022 2021 Change
(Dollars in millions)
Macao:
The Venetian Macao $ (39) $ 230 (117.0) %
The Londoner Macao (147) (61) 141.0 %
The Parisian Macao (77) (3) 2,466.7 %
The Plaza Macao and Four Seasons Macao 55 156 (64.7) %
Sands Macao (61) (52) 17.3 %
Ferry Operations and Other (4) (6) (33.3) %
(273) 264 (203.4) %
Marina Bay Sands 783 271 188.9 %
Consolidated adjusted property EBITDA(1) $ 510 $ 535 (4.7) %
Las Vegas Operating Properties (2) $ 63 $ 136 (53.7) %
____________________
(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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Nine Months Ended
2022 2021
(In millions)
Consolidated adjusted property EBITDA $
510
Other Operating Costs and Expenses Stock-based compensation(a) (20) (8) Corporate (167) (169) Pre-opening (11) (15) Development (108) (59) Depreciation and amortization (780) (775) Amortization of leasehold interests in land (42) (42) Loss on disposal or impairment of assets (8) (18) Operating loss (626) (551) Other Non-Operating Costs and Expenses Interest income 56 3 Interest expense, net of amounts capitalized (501) (469) Other expense (29) (19) Loss on modification or early retirement of debt - (137) Income tax (expense) benefit (172) 19 Net loss from continuing operations $
(1,272)
(a)During the nine months ended
(2)
Adjusted property EBITDA at ourMacao operations decreased$537 million compared to the nine months endedSeptember 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
Discontinued Operations
Adjusted property EBITDA at ourLas Vegas Operating Properties decreased$73 million compared to the nine months endedSeptember 30, 2021 . The decrease was primarily due to the current year activity representing 53 days of operations as we completed the sale of the Las Vegas Operating properties onFebruary 23, 2022 , partially offset by increased casino and room operations asLas Vegas Operating Properties operated under pre-pandemic guidelines. 53
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Interest Expense
The following table summarizes information related to interest expense:
Nine Months Ended September 30,
2022 2021
(Dollars in millions)
Interest cost $ 504 $ 480
Less - capitalized interest (3) (11)
Interest expense, net $ 501 $ 469
Weighted average total debt balance $ 15,188 $ 14,509
Weighted average interest rate 4.4 % 4.4 %
Interest cost increased$24 million compared to the nine months endedSeptember 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 endedSeptember 30, 2022 . The weighted average interest rate remained flat during the nine months endedSeptember 30, 2022 when compared to the nine months endedSeptember 30, 2021 , primarily driven by the increase in the underlying benchmark rate on our Singapore Credit Facility and the increase in interest rates on the SCL senior notes as a result of the credit rating downgrade to BB+ by S&P inFebruary 2022 , and by Fitch inJune 2022 ., offset by the extinguishment of the SCL 4.600% senior notes in Q3 2021.
Other Factors Affecting Earnings
Interest income was$56 million for the nine months endedSeptember 30, 2022 , compared to$3 million for the nine months endedSeptember 30, 2021 . Interest income during the nine months endedSeptember 30, 2022 was primarily attributed to$38 million in interest income on money market funds and bank deposits driven by an increase in cash due to the sale of theLas Vegas Operating Properties and higher interest rates. We also had$14 million in interest income on the seller financing loan provided in connection with the sale of theLas Vegas Operating Properties in 2022. Other expense was$29 million for the nine months endedSeptember 30, 2022 , compared to$19 million for the nine months endedSeptember 30, 2021 . Other expense during the nine months endedSeptember 30, 2022 , was primarily attributable to$39 million of foreign currency transaction losses driven byU.S. dollar denominated debt held by SCL, partially offset by$11 million of foreign currency transaction gains driven bySingapore dollar denominated intercompany debt reported inU.S. dollars. Our income tax expense was$172 million on a loss before income taxes of$1.10 billion for the nine months endedSeptember 30, 2022 , resulting in a 15.6% effective income tax rate. This compares to a (1.6)% effective income tax rate for the nine months endedSeptember 30, 2021 . The income tax expense for the nine months endedSeptember 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 nine months endedSeptember 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$370 million for the nine months endedSeptember 30, 2022 , compared to$241 million for the nine months endedSeptember 30, 2021 . These amounts were primarily related to the noncontrolling interest of SCL.
Additional Information Regarding our Retail Mall Operations
We own and operate retail malls at ourIntegrated Resorts at The Venetian Macao, ThePlaza Macao and Four Seasons Macao, The Londoner Macao, The Parisian Macao andMarina Bay Sands . Management believes being in the retail mall business and, specifically, owning some of the largest retail properties inAsia will provide meaningful value for us, particularly as the retail market inAsia continues to grow. 54
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Our malls are designed to complement our other unique amenities and service
offerings provided by our
The following tables summarize the results of our mall operations on the Cotai Strip and at Marina Bay Sands for the three and nine months endedSeptember 30, 2022 and 2021: Shoppes at Shoppes at Four Shoppes at Shoppes at The Shoppes at Marina Venetian Seasons Londoner Parisian Bay Sands (In millions) For the three months endedSeptember 30, 2022 Mall revenues: Minimum rents(1)$ 40 $ 29 $ 7 $ 5 $ 37 Overage rents 2 1 2 - 11 Rent concessions(2) (22) (9) (3) (3) - Total overage rents and rent concessions (20) (8) (1) (3) 11 CAM, levies and direct recoveries 6 2 3 3 7 Total mall revenues 26 23 9 5 55 Mall operating expenses: Common area maintenance 2 1 2 1 6 Marketing and other direct operating expenses 1 1 1 - 1 Mall operating expenses 3 2 3 1 7 Property taxes(4) - - - - 1 Mall-related expenses(5) $ 3 $ 2 $ 3 $ 1 $ 8 For the three months endedSeptember 30, 2021 Mall revenues: Minimum rents(1)$ 45 $ 29 $ 8 $ 7 $ 35 Overage rents 4 20 3 1 6 Rent concessions(2) (8) - (1) (1) (6) Total overage rents and rent concessions (4) 20 2 - - CAM, levies and direct recoveries 8 3 3 3 6 Total mall revenues 49 52 13 10 41 Mall operating expenses: Common area maintenance 3 1 1 1 4 Marketing and other direct operating expenses 1 1 1 1 1 Mall operating expenses 4 2 2 2 5 Property taxes(4) - - - - 2 Mall-related expenses(5) $ 4 $ 2 $ 2 $ 2 $ 7 55
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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 nine months ended September 30,
2022
Mall revenues:
Minimum rents(1) $ 128 $ 90 $ 22 $ 18 $ 110
Overage rents 3 3 8 1 27
Rent concessions(2) (41) (10) (4) (6) -
Total overage rents and rent
concessions (38) (7) 4 (5) 27
CAM, levies and direct recoveries 21 7 9 7 22
Total mall revenues 111 90 35 20 159
Mall operating expenses:
Common area maintenance 8 3 5 3 15
Marketing and other direct operating
expenses 5 4 3 2 4
Mall operating expenses 13 7 8 5 19
Property taxes(4) 1 - - - 3
Mall-related expenses(5) $ 14 $ 7 $ 8 $ 5 $ 22
For the nine months ended September 30,
2021
Mall revenues:
Minimum rents(1) $ 137 $ 91 $ 22 $ 23 $ 108
Overage rents 10 28 13 3 14
Rent concessions(2) (25) (1) (3) (4) (20)
Other(3) - - - - 6
Total overage rents, rent concessions
and other (15) 27 10 (1) -
CAM, levies and direct recoveries 22 7 10 8 19
Total mall revenues 144 125 42 30 127
Mall operating expenses:
Common area maintenance 9 4 5 3 12
Marketing and other direct operating
expenses 4 2 2 2 4
Mall operating expenses 13 6 7 5 16
Property taxes(4) 1 - - - 5
Provision for (recovery of) credit
losses (1) - - 3 -
Mall-related expenses(5) $ 13 $ 6 $ 7 $ 8 $ 21
____________________
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 the 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.
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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.
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
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$3.14 billion at exchange rates in effect onSeptember 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 amended the Second Development Agreement and extended the deadline for MBS to commence construction, as defined in theSecond 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 the Second 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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