LAS VEGAS SANDS CORP. The following discussion should be read in conjunction with, and is qualified in its entirety by, the audited consolidated financial statements and the notes thereto, and other financial information included in this Form 10-K. 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." Overview We view each of ourIntegrated Resorts as an operating segment. Our operating segments inMacao consist of The Venetian Macao; The Londoner Macao; The Parisian Macao; ThePlaza Macao andFour Seasons Hotel Macao ; and the SandsMacao . Our operating segment inSingapore isMarina Bay Sands . Our operating segments in theU.S. consist of theLas Vegas Operating Properties , which includes The Venetian Resort Las Vegas and the Sands Expo Center, and, throughMay 30, 2019 , Sands Bethlehem. During 2020, we had achieved milestones in advancing several of our strategic objectives. We continued progress on our key development projects inMacao for the conversion of Sands Cotai Central into The Londoner Macao and we opened The Grand Suites at Four Seasons inOctober 2020 , featuring gaming spaces and 289 luxury suites. InSingapore , we initiated development activities associated with theMBS Expansion Project . Finally, we continued to strengthen our balance sheet with the issuance of SCL 2026 and 2030 Senior Notes to provide funds for incremental liquidity and general corporate purposes. COVID-19 Pandemic In earlyJanuary 2020 , an outbreak of a respiratory illness caused by a novel coronavirus was identified and the disease has since spread rapidly across the world causing theWorld Health Organization to declare onMarch 12, 2020 , the outbreak of a pandemic (the "COVID-19 Pandemic"). As a result, people across the globe were advised to avoid non-essential travel. Steps were also taken by various countries, including those in which we operate, to restrict inbound international travel and implement closures of non-essential operations, including ourIntegrated Resorts for certain periods in 2020 in each of the jurisdictions in which we operate, to contain the spread of the virus. Visitation toMacao decreased substantially throughout 2020 as a result of various government policies limiting travel. Travel restrictions and quarantine requirements have been varying in response to changes in circumstances in other countries. A complete ban on entry, or a need to undergo enhanced quarantine requirements depending on the person's residency and their recent travel history, remains in place forMacao residents, foreign workers residing inMacao and international travelers from countries other than mainlandChina . BeginningDecember 21, 2020 , all travelers who have been to any overseas territory, includingHong Kong , but not including mainlandChina orTaiwan , in the past 14 days will be subject to a 21-day compulsory quarantine at a designated location when arriving inMacao . Those travelers arriving from mainlandChina orTaiwan will be subject to a 14-day quarantine. People from low risk cities inChina may enterMacao quarantine free, subject to them holding the appropriate travel documents, a negative COVID-19 test result and a green health-code. All other foreign nationals, including those holding a temporary work permit, are still not permitted to enterMacao . The China Individual Visit Scheme ("China IVS") recommenced for certain regions fromAugust 12, 2020 , and was extended to more jurisdictions within mainlandChina effectiveSeptember 23, 2020 . General travel restrictions within mainlandChina continue to exist and are updated and revised based on evolving public health consideraions withinChina . Following suspension of all gaming operations onFebruary 5, 2020 by theMacao government, ourMacao casino operations resumed onFebruary 20, 2020 , except for operations at The Londoner Macao, which resumed onFebruary 27, 2020 . Additional health safeguards, such as the requirement to present a negative COVID-19 test certificate prior to entering the casino, have been implemented, as well as the ongoing limitation on the number of seats per table game, slot machine spacing, temperature checks and mandatory mask protection. Management is currently unable to determine when these measures will be modified or cease to be necessary. 42
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Some of ourMacao hotel facilities were also closed during the casino suspension in response to the drop in visitation and, with the exception of the ConradMacao , Cotai Strip which reopened onJune 13, 2020 , these hotels were gradually reopened fromFebruary 20, 2020 . In support of theMacao government's initiatives to fight the COVID-19 Pandemic, we provided one tower (approximately 2,000 hotel rooms) for quarantine purposes at theSheraton Grand Macao Hotel , Cotai Strip to theMacao government to house individuals who returned toMacao . This tower has been utilized for quarantine purposes on several occasions including fromMarch 28 to April 30, 2020 ; fromJune 7 to August 14, 2020 ; fromDecember 20, 2020 untilFebruary 6, 2021 ; and will resume onFebruary 20, 2021 until further notice. Operating hours at restaurants across ourMacao properties are continuously being adjusted in line with movements in guest visitation. The majority of retail outlets in the various shopping malls are open with reduced operating hours. The timing and manner in which these areas will return to full operation are currently unknown. TheHong Kong government temporarily closed theHong Kong China Ferry Terminal inKowloon onJanuary 30, 2020 , and theHong Kong Macao Ferry Terminal inHong Kong onFebruary 4, 2020 . In response, we have suspended ourMacao ferry operations betweenMacao andHong Kong . The timing and manner in which our normal ferry operations will be able to resume are currently unknown. Our operations inMacao have been significantly impacted by the lack of visitation toMacao . TheMacao government announced total visitation from mainlandChina toMacao decreased 83.0% for 2020, as compared to 2019. TheMacao government also announced gross gaming revenue decreased by 79.3% for 2020, as compared to 2019. Beginning onApril 7, 2020 , theSingapore government suspended all casino and non-essential operations, including all operations at Marina Bay Sands, due to the COVID-19 Pandemic. OurSingapore operations were permitted to reopen beginning onJune 19, 2020 ; however, this only included certain restaurants and retail mall operations. The casino operations reopened onJuly 1, 2020 ; however, entry was initially limited to annual levy holders and certainSands Rewards Club ("SRC") members. The casino opened to all SRC members as ofJuly 9, 2020 , and to the public as ofOctober 23, 2020 . All operations are currently subject to capacity limitations. OnMay 28, 2020 , in support of theSingapore government's initiatives to fight the COVID-19 Pandemic,Marina Bay Sands entered into an agreement with theSingapore government to utilize all three hotel towers to houseSingapore residents for quarantine upon their initial return from other jurisdictions. The government's use of the first tower ceased onJune 26, 2020 , while usage of the second and third towers continued throughJuly 26, 2020 . Beginning onJuly 17, 2020 , the first tower reopened for normal operations, while the second and third towers reopened onAugust 1, 2020 . OnSeptember 7, 2020 , the STB announced that event organizers would be allowed to apply for pilot events with limited capacities of up to 250 attendees fromOctober 1, 2020 . The date on which nightlife venues may reopen is unknown at this time. InDecember 2020 ,Singapore entered phase 3 of reopening, which, among other things, increased our casino operating capacity forMarina Bay Sands from 3,000 players to 3,750 players. Visitation toMarina Bay Sands declined significantly due to the COVID-19 Pandemic. The STB announced for the 12 months endedNovember 30, 2020 (the latest information publicly available at the time of filing), total visitation toSingapore decreased approximately 76.6%, as compared to the same period in 2019. TheNevada government suspended all casino and non-essential operations, including all operations at theLas Vegas Operating Properties , beginning onMarch 18, 2020 , due to the COVID-19 Pandemic. TheNevada government allowed casinos to reopen onJune 4, 2020 , under strict guidelines issued by theGaming Control Board and theState of Nevada . We reopened the casino, suites withinThe Venetian Tower andThe Palazzo Tower , and select food and beverage outlets onJune 4, 2020 , with certain operations subject to reduced capacity. BeginningOctober 1, 2020 , the limit for both public and private events increased from 50 people to the lesser of 250 people or 50% of the room's capacity (excluding employees, organizers and performers) provided social distancing measures and various safety and related protocols were followed. MICE events for more than 250 people, but no more than 1,000 people, were allowed subject to certain requirements. Larger venues, defined as having more than a 2,500 fixed-seating capacity, were allowed to host a gathering of 10% of their total capacity provided they met additional requirements. As a result of these requirements and lack of customer demand in connection with the impact of the 43
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COVID-19 Pandemic, we have not held any MICE events at ourLas Vegas Operating Properties since reopening onJune 4, 2020 . InNovember 2020 , theNevada government tightened capacity and other restrictions, which included, among other things, a 25% capacity limit for gaming establishments and the lesser of 25% or 50 people for MICE events. These increased restrictions will be in place until at leastFebruary 14, 2021 . Visitation to ourLas Vegas Operating Properties declined due to the COVID-19 Pandemic. The LVCVA announced for the 12 months endedNovember 30, 2020 (the latest information publicly available at the time of filing), total visitation toLas Vegas decreased 49.8%, as compared to the same period in 2019. The LVCVA also announced for the 12 months endedNovember 30, 2020 (the latest information publicly available at the time of filing), gross gaming revenue for the Las Vegas Strip decreased 38.5%, as compared to the same period in 2019. In connection with reopening theSingapore andLas Vegas 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. Additionally, there is uncertainty around the impact the COVID-19 Pandemic will continue to have on operations in future periods. For example, there have been a number of MICE event cancellations or rescheduling through the end of 2021 and there may be additional restrictions placed on our other services, such as nightclubs and entertainment venues for ourLas Vegas properties. 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, the China IVS and other visa programs are suspended or the global response to contain the COVID-19 Pandemic escalates or is unsuccessful, our operations, cash flows and financial condition will be additionally and materially impacted. While each of our properties is currently open and operating at reduced levels due to lower visitation and the implementation of required safety measures as described above, the current economic and regulatory environment on a global basis and in each of our jurisdictions continues to evolve. We cannot predict the manner in which governments will react as the global and regional impact of COVID-19 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$2.12 billion and access to$1.50 billion ,$2.02 billion and$448 million of available borrowing capacity from our LVSC Revolving Facility, 2018 SCL Revolving Facility and the 2012 Singapore Revolving Facility, respectively, andSGD 3.69 billion (approximately$2.79 billion at exchange rates in effect onDecember 31, 2020 ) under our Singapore Delayed Draw Term Facility, exclusively for capital expenditures for theMBS Expansion Project , as ofDecember 31, 2020 . OnJanuary 25, 2021 , SCL entered into an agreement with lenders to increase commitments under the 2018 SCL Credit Facility byHKD 3.83 billion (approximately$494 million at exchange rates in effect on the date of this transaction). Subsequently, onJanuary 29, 2021 , SCL drew down$29 million andHKD 2.13 billion (approximately$274 million at exchange rates in effect onJanuary 29, 2021 ) under this facility for general corporate purposes, resulting in remaining available borrowing capacity of$2.21 billion . We believe we are able to support continuing operations, complete the major construction projects that are underway 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 of non-essential items. Key Operating Revenue Measurements Operating revenues at The Venetian Macao, The Londoner Macao, The ParisianMacao , ThePlaza Macao andFour Seasons Hotel Macao ,Marina Bay Sands and ourLas Vegas Operating Properties are dependent upon the volume of customers who stay at the hotel, which affects the price charged for hotel rooms and our gaming volume. Operating revenues at Sands Macao are principally driven by casino customers 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 customers 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 44
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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 win percentage is expected to be 3.15% to 3.45% inMacao andSingapore . Actual win percentage may vary from our expected win percentage and historical win and hold percentages. Generally, slot machine play is conducted on a cash basis. InMacao andSingapore , 24.0% and 14.6%, respectively, of our table games play was conducted on a credit basis for the year endedDecember 31, 2020 . Casino revenue measurements for theU.S. : The volume measurements in theU.S. are slot handle, as previously described, and table games drop, which is the total amount of cash and net markers issued deposited in the table drop box. We view table games win as a percentage of drop and slot hold as a percentage of slot handle. 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. Based upon our mix of table games, our table games are expected to produce a win percentage of 18% to 26% for Baccarat and 16% to 24% for non-Baccarat. Actual win percentage may vary from our expected win percentage and historical win and hold percentages. Similar toMacao andSingapore , slot machine play is generally conducted on a cash basis. Approximately 68.8% of our table games play at ourLas Vegas Operating Properties was conducted on a credit basis for the year endedDecember 31, 2020 . 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 andSingapore governments 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, excluding rent concessions, 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 sum of 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. 45
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Year EndedDecember 31, 2020 Compared to the Year EndedDecember 31, 2019 Summary Financial Results Our financial results were adversely impacted by decreased visitation at each of our operating properties due to the COVID-19 Pandemic. See "COVID-19 Pandemic" for further information. Net revenues for the year endedDecember 31, 2020 were$3.61 billion , compared to$13.74 billion for the year endedDecember 31, 2019 . Operating loss was$1.69 billion , compared to operating income of$3.70 billion for the year endedDecember 31, 2019 . Net loss was$2.14 billion for the year endedDecember 31, 2020 , compared to net income of$3.30 billion for the year endedDecember 31, 2019 . Operating Revenues Our net revenues consisted of the following: Year Ended December 31, Percent 2020 2019 Change (Dollars in millions) Casino$ 2,268 $ 9,828 (76.9) % Rooms 498 1,752 (71.6) % Food and beverage 283 897 (68.5) % Mall 381 716 (46.8) % Convention, retail and other 182 546 (66.7) % Total net revenues$ 3,612 $ 13,739 (73.7) % Consolidated net revenues were$3.61 billion for the year endedDecember 31, 2020 , a decrease of$10.13 billion compared to$13.74 billion for the year endedDecember 31, 2019 , due to decreases of$7.12 billion ,$1.84 billion and$940 million at ourMacao operations,Marina Bay Sands and ourLas Vegas Operating Properties , respectively. The decreases were driven by decreased visitation and temporary property closures as a result of the COVID-19 Pandemic, as described above. Additionally, there was a$227 million decrease due to the sale of SandsBethlehem onMay 31, 2019 . 46
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Net casino revenues decreased$7.56 billion compared to the year endedDecember 31, 2019 , driven by temporary property closures and decreased visitation once our properties reopened as a result of the COVID-19 Pandemic described above. Additionally, casinos at each of our properties continue to operate at a reduced capacity due to social distancing measures. Revenues at ourMacao operations andMarina Bay Sands decreased$5.85 billion and$1.30 billion , respectively, driven by decreases in Non-Rolling Chip drop and Rolling Chip volume, while revenues at ourLas Vegas Operating Properties decreased$217 million due to decreases in table games drop and win percentage and slot handle. Additionally, there was a decrease of$199 million attributable to the sale of Sands Bethlehem onMay 31, 2019 . The following table summarizes the results of our casino activity: Year Ended December 31, 2020 2019 Change (Dollars in millions) Macao Operations: The Venetian Macao Total casino revenues$ 531 $ 2,875 (81.5) % Non-Rolling Chip drop$ 1,925 $ 9,275 (79.2) % Non-Rolling Chip win percentage 25.4 % 26.2 % (0.8) pts Rolling Chip volume$ 3,775 $ 25,715 (85.3) % Rolling Chip win percentage 3.12 % 3.29 % (0.17) pts Slot handle$ 1,041 $ 3,952 (73.7) % Slot hold percentage 4.2 % 4.8 % (0.6) pts The Londoner Macao Total casino revenues$ 192 $ 1,541 (87.5) % Non-Rolling Chip drop$ 881 $ 6,586 (86.6) % Non-Rolling Chip win percentage 22.6 % 22.7 % (0.1) pts Rolling Chip volume$ 167 $ 5,364 (96.9) % Rolling Chip win percentage 5.85 % 3.36 % 2.49 pts Slot handle$ 531 $ 4,107 (87.1) % Slot hold percentage 4.3 % 4.2 % 0.1 pts The Parisian Macao Total casino revenues$ 180 $ 1,376 (86.9) % Non-Rolling Chip drop$ 844 $ 4,522 (81.3) % Non-Rolling Chip win percentage 23.1 % 23.1 % - pts Rolling Chip volume$ 3,141 $ 16,121 (80.5) % Rolling Chip win percentage 1.13 % 3.43 % (2.30) pts Slot handle$ 763 $ 4,217 (81.9) % Slot hold percentage 3.7 % 3.7 % - pts ThePlaza Macao and Four Seasons Hotel Macao Total casino revenues$ 159 $ 650 (75.5) % Non-Rolling Chip drop$ 544 $ 1,473 (63.1) % Non-Rolling Chip win percentage 24.6 % 24.4 % 0.2 pts Rolling Chip volume$ 3,656 $ 13,368 (72.7) % Rolling Chip win percentage 2.46 % 3.88 % (1.42) pts Slot handle$ 37 $ 518 (92.9) % Slot hold percentage 4.6 % 6.0 % (1.4) pts 47
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Year Ended December 31,
2020 2019 Change
Sands Macao
Total casino revenues $ 107 $ 576 (81.4) %
Non-Rolling Chip drop $ 451 $ 2,634 (82.9) %
Non-Rolling Chip win percentage 18.7 % 18.3 % 0.4 pts
Rolling Chip volume $ 1,361 $ 4,605 (70.4) %
Rolling Chip win percentage 2.44 % 2.52 % (0.08) pts
Slot handle $ 549 $ 2,596 (78.9) %
Slot hold percentage 3.1 % 3.3 % (0.2) pts
Singapore Operations:
Marina Bay Sands
Total casino revenues $ 872 $ 2,167 (59.8) %
Non-Rolling Chip drop $ 2,111 $ 5,194 (59.4) %
Non-Rolling Chip win percentage 18.6 % 20.7 % (2.1) pts
Rolling Chip volume $ 9,495 $ 29,504 (67.8) %
Rolling Chip win percentage 3.56 % 3.40 % 0.16 pts
Slot handle $ 8,915 $ 14,183 (37.1) %
Slot hold percentage 4.4 % 4.6 % (0.2) pts
U.S. Operations:
Las Vegas Operating Properties
Total casino revenues $ 227 $ 444 (48.9) %
Table games drop $ 1,258 $ 1,945 (35.3) %
Table games win percentage 13.2 % 19.2 % (6.0) pts
Slot handle $ 1,951 $ 2,960 (34.1) %
Slot hold percentage 8.0 % 8.2 % (0.2) 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$1.25 billion compared to the year endedDecember 31, 2019 . The decrease was primarily a result of temporary property closures and decreased visitation at each of our properties due to the COVID-19 Pandemic. Additionally, certain rooms within The Londoner Macao andMarina Bay Sands were utilized for quarantine purposes and certain rooms across ourMacao properties were used by team members due to travel restrictions. The following table summarizes the results of our room activity: Year Ended December 31, 2020 2019 Change (Room revenues in millions) Macao Operations: The Venetian Macao Total room revenues$ 46 $ 222 (79.3) % Occupancy rate 27.2 % 95.9 % (68.7) pts Average daily room rate (ADR)$ 197 $ 227 (13.2) % Revenue per available room (RevPAR)$ 53 $ 217 (75.6) % The Londoner Macao Total room revenues$ 42 $ 320 (86.9) % Occupancy rate 18.3 % 96.8 % (78.5) pts Average daily room rate (ADR)$ 164 $ 160 2.5 % Revenue per available room (RevPAR)$ 30 $ 155 (80.6) % The Parisian Macao Total room revenues$ 33 $ 130 (74.6) % Occupancy rate 27.3 % 97.2 % (69.9) pts Average daily room rate (ADR)$ 145 $ 159 (8.8) % Revenue per available room (RevPAR)$ 39 $ 155 (74.8) % ThePlaza Macao andFour Seasons Hotel Macao (1) Total room revenues$ 17 $ 41 (58.5) % Occupancy rate 28.5 % 91.3 % (62.8) pts Average daily room rate (ADR)$ 394 $ 332 18.7 % Revenue per available room (RevPAR)$ 113 $ 303 (62.7) % Sands Macao Total room revenues $ 6$ 18 (66.7) % Occupancy rate 39.4 % 99.8 % (60.4) pts Average daily room rate (ADR)$ 157 $ 175 (10.3) % Revenue per available room (RevPAR)$ 62 $ 175 (64.6) % Singapore Operations: Marina Bay Sands Total room revenues$ 136 $ 404 (66.3) % Occupancy rate 69.1 % 97.6 % (28.5) pts Average daily room rate (ADR)$ 313 $ 450 (30.4) % Revenue per available room (RevPAR)$ 216 $ 439 (50.8) % U.S. Operations:Las Vegas Operating Properties Total room revenues$ 218 $ 610 (64.3) % Occupancy rate 56.3 % 95.3 % (39.0) pts Average daily room rate (ADR)$ 220 $ 251 (12.4) % Revenue per available room (RevPAR)$ 124 $ 239 (48.1) %
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(1) Includes The Grand Suites at Four Seasons, which opened in
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Food and beverage revenues decreased$614 million compared to the year endedDecember 31, 2019 . The decrease was primarily due to decreases of$239 million ,$220 million and$144 million at ourMacao properties, ourLas Vegas Operating Properties andMarina Bay Sands , respectively, as a result of the COVID-19 Pandemic described above. Mall revenues decreased$335 million compared to the year endedDecember 31, 2019 . The decrease was primarily due to$272 million in rent concessions granted to our mall tenants inMacao andSingapore , as well as a$59 million decrease in overage rents resulting from lower traffic in our malls as a result of the COVID-19 Pandemic. Our Macao Operations were also impacted by lower occupancy due to the impact of the COVID-19 Pandemic. For further information related to the financial performance of our malls, see "Additional Information Regarding our Retail Mall Operations." The following table summarizes the results of our malls on the Cotai Strip inMacao and inSingapore : Year Ended December 31, 2020 2019 Change (Mall revenues in millions) Macao Operations: Shoppes at Venetian Total mall revenues$ 125 $ 253 (50.6) % Mall gross leasable area (in square feet) 812,936 812,938 - % Occupancy 83.8 % 91.4 % (7.6) pts Base rent per square foot$ 302 $ 277 9.0 % Tenant sales per square foot(1)$ 794 $ 1,709 (53.5) % Shoppes at Londoner(2) Total mall revenues$ 37 $ 70 (47.1) % Mall gross leasable area (in square feet) 525,206 525,222 - % Occupancy 83.9 % 90.1 % (6.2) pts Base rent per square foot$ 96 $ 107 (10.3) % Tenant sales per square foot(1)$ 409 $ 934 (56.2) % Shoppes at Parisian Total mall revenues$ 27 $ 53 (49.1) % Mall gross leasable area (in square feet) 295,963 295,920 - % Occupancy 78.5 % 86.2 % (7.7) pts Base rent per square foot$ 156 $ 149 4.7 % Tenant sales per square foot(1)$ 349 $ 785 (55.5) % Shoppes at Four Seasons Total mall revenues$ 79 $ 151 (47.7) % Mall gross leasable area (in square feet) 244,104 242,425 0.7 % Occupancy 94.9 % 95.0 % (0.1) pts Base rent per square foot$ 540 $ 544 (0.7) % Tenant sales per square foot(1)$ 2,744 $ 5,478 (49.9) % Singapore Operations: The Shoppes at Marina Bay Sands Total mall revenues$ 112 $ 185 (39.5) % Mall gross leasable area (in square feet) 620,330 593,714 4.5 % Occupancy 98.2 % 96.4 % 1.8 pts Base rent per square foot$ 258 $ 270 (4.4) % Tenant sales per square foot(1)$ 1,053 $ 2,062
(48.9) %
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Note: This table excludes the results of mall operations at Sands Macao.
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(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. (2)The Shoppes at Londoner will feature up to approximately 600,000 square feet of gross leasable area upon completion of all phases of the renovation, rebranding and expansion to The Londoner Macao. Convention, retail and other revenues decreased$364 million compared to the year endedDecember 31, 2019 , driven by decreases of$111 million ,$102 million and$61 million at ourLas Vegas Operating Properties ,Macao properties andMarina Bay Sands , respectively, as a result of the cancellation of MICE events and decreased visitation across our properties due to the COVID-19 Pandemic described above. Additionally, there was a$76 million decrease related to our ferry operations, due to the temporary closure of theHong Kong China Ferry Terminal since lateJanuary 2020 and theHong Kong Macao Ferry Terminal since earlyFebruary 2020 in response to the COVID-19 Pandemic. Operating Expenses Our operating expenses consisted of the following: Year Ended December 31, Percent 2020 2019 Change (Dollars in millions) Casino$ 1,758 $ 5,304 (66.9) % Rooms 271 444 (39.0) % Food and beverage 371 702 (47.2) % Mall 59 78 (24.4) % Convention, retail and other 149 304 (51.0) % Provision for credit losses 99 30 230.0 % General and administrative 1,093 1,502 (27.2) % Corporate 168 313 (46.3) % Pre-opening 19 34 (44.1) % Development 18 24 (25.0) % Depreciation and amortization 1,160 1,165 (0.4) % Amortization of leasehold interests in land 55 51 7.8 % Loss on disposal or impairment of assets 80 90 (11.1) % Total operating expenses$ 5,300 $ 10,041 (47.2) % Operating expenses were$5.30 billion for the year endedDecember 31, 2020 , a decrease of$4.74 billion compared to$10.04 billion for the year endedDecember 31, 2019 . The decrease was primarily driven by a$3.55 billion decrease in casino expenses. Additionally, general and administrative expenses decreased$409 million and food and beverage expenses decreased$331 million . The decreases were mainly driven by the COVID-19 Pandemic described above. Although management has implemented certain cost reduction programs, operating margins in each business segment were negatively impacted due to employee and other costs incurred during this period of decreased visitation and property closures. We have maintained our staffing levels across our jurisdictions through significantly reduced visitation. The level of payroll costs during 2020 were reduced by$109 million in connection with the Job Support Scheme inSingapore and the Employee Retention Credit under the Coronavirus Aid, Relief, and Economic Security ("CARES") Act in theU.S. We have also implemented payroll cost saving initiatives across each of our properties, including utilization of paid time off and voluntary unpaid leave. Finally, our bonus and incentive expense in 2020 decreased$262 million from 2019 due to not meeting certain performance criteria due to impact of the COVID-19 Pandemic. Casino expenses decreased$3.55 billion compared to the year endedDecember 31, 2019 . The decrease was primarily attributable to a decrease of$3.06 billion in gaming taxes due to decreased casino revenues, as previously described. Additionally, the sale of Sands Bethlehem inMay 2019 resulted in a$127 million decrease. 51
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Room expenses decreased$173 million compared to the year endedDecember 31, 2019 . The decrease was driven by decreases of$90 million ,$54 million and$27 million at ourMacao properties, ourLas Vegas Operating Properties andMarina Bay Sands , respectively. These decreases are consistent with the reduction in room revenue. Food and beverage expenses decreased$331 million compared to the year endedDecember 31, 2019 , due to decreases of$135 million ,$99 million and$87 million at ourMacao properties, ourLas Vegas Operating Properties andMarina Bay Sands , respectively. These decreases are consistent with the reduction in food and beverage revenues. Convention, retail and other expenses decreased$155 million compared to the year endedDecember 31, 2019 , driven by a$69 million decrease related to the temporary closure of the ferry terminals as previously described. Additionally, ourMacao properties,Las Vegas Operating Properties andMarina Bay Sands decreased$35 million ,$31 million and$17 million , respectively, as a result of the COVID-19 Pandemic described above. The provision for credit losses was$99 million for the year endedDecember 31, 2020 , compared to$30 million for the year endedDecember 31, 2019 . The increase was driven by the aging of receivables for premium players at ourMacao properties andMarina Bay Sands during 2020, as travel restrictions have limited the ability for patrons to redeem markers. The amount of this provision can vary over short periods of time because of factors specific to the customers who owe us money from gaming activities at any given time. 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 decreased$409 million compared to the year endedDecember 31, 2019 , due to decreases of$169 million ,$116 million and$92 million at ourMacao properties,Marina Bay Sands and ourLas Vegas Operating Properties , respectively. The decreases were primarily driven by decreases in marketing, payroll and property operation costs. Additionally, the sale of SandsBethlehem inMay 2019 resulted in a$32 million decrease. Corporate expenses decreased$145 million compared to the year endedDecember 31, 2019 . The decrease was primarily driven by a nonrecurring legal settlement recorded in 2019 and a decrease in payroll costs as described above. Pre-opening expenses represent personnel and other costs incurred prior to the opening of new ventures, which are expensed as incurred. Development expenses include the costs associated with our evaluation and pursuit of new business opportunities, which are also expensed as incurred. Loss on disposal or impairment of assets was$80 million for the year endedDecember 31, 2020 , compared to$90 million for the year endedDecember 31, 2019 . The loss for the year endedDecember 31, 2020 , consisted primarily of asset disposals and demolition costs related to The Londoner Macao. The loss for the year endedDecember 31, 2019 , consisted primarily of a$65 million impairment of our ferries inMacao . 52
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Segment Adjusted Property EBITDA
The following table summarizes information related to our segments (see "Item 8
- Financial Statements and Supplementary Data - Notes to Consolidated Financial
Statements - Note 17 - Segment Information" for discussion of our operating
segments and a reconciliation of consolidated adjusted property EBITDA to net
income/loss):
Year Ended December 31,
Percent
2020 2019 Change
(Dollars in millions)
Macao:
The Venetian Macao $ (53) $ 1,407 (103.8) %
The Londoner Macao (184) 726 (125.3) %
The Parisian Macao (131) 544 (124.1) %
The Plaza Macao and Four Seasons Hotel Macao 33 345 (90.4) %
Sands Macao (76) 175 (143.4) %
Ferry Operations and Other (20) (8) 150.0 %
(431) 3,189 (113.5) %
Marina Bay Sands 383 1,661 (76.9) %
United States:
Las Vegas Operating Properties (124) 487 (125.5) %
Sands Bethlehem(1) - 52 (100.0) %
(124) 539 (123.0) %
Consolidated adjusted property EBITDA(2) $ (172) $ 5,389 (103.2) %
_________________________
(1)We completed the sale of Sands Bethlehem onMay 31, 2019 . Results of operations include Sands Bethlehem throughMay 30, 2019 . (2)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 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 on sale of Sands Bethlehem, 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 our operations with those of our 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. 53
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Adjusted property EBITDA at ourMacao operations decreased$3.62 billion compared to the year endedDecember 31, 2019 , due to a decrease in operations driven by government-mandated travel restrictions, property closures and overall reduced visitation since lateJanuary 2020 resulting from the COVID-19 Pandemic. Adjusted property EBITDA at Marina Bay Sands decreased$1.28 billion compared to the year endedDecember 31, 2019 , due to a decrease in operations, driven by the temporary closure of the property and reduced visitation resulting from the COVID-19 Pandemic. Adjusted property EBITDA at ourLas Vegas Operating Properties decreased$611 million compared to the year endedDecember 31, 2019 , primarily due to no MICE events after the first quarter of 2020 and decreased room and casino revenues driven by the temporary closure of the properties and overall reduced visitation resulting from the COVID-19 Pandemic. Interest Expense The following table summarizes information related to interest expense: Year Ended December 31, 2020 2019 (Dollars in millions) Interest cost$ 544 $ 549 Add - imputed interest on deferred proceeds from sale of The Shoppes at The Palazzo 13 15 Less - capitalized interest (21) (9) Interest expense, net$ 536 $ 555 Cash paid for interest$ 440 $ 471 Weighted average total debt balance$ 13,412 $ 12,154 Weighted average interest rate 4.1 % 4.5 % Interest cost decreased$5 million compared to the year endedDecember 31, 2019 , resulting primarily from decreases in our weighted average interest rate, offset by the increase in weighted average total debt balance. The decrease in weighted average interest rate was due to a decrease in the SingaporeOffer Rate ("SOR"). The weighted average debt balance increased in connection with the issuance of the SCL 2026 and 2030 Senior Notes inJune 2020 and borrowings on theSingapore Delayed Draw Term Loan inSeptember 2020 (see "Item 8 - Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements - Note 8 - Long-Term Debt"). Other Factors Affecting Earnings Other income was$22 million for the year endedDecember 31, 2020 , compared to$23 million during the year endedDecember 31, 2019 . Other income during the year endedDecember 31, 2020 , was primarily attributable to$20 million of foreign currency transaction gains, driven by theU.S. dollar-denominated debt held by SCL. Our income tax benefit was$38 million on a loss before income taxes of$2.18 billion for the year endedDecember 31, 2020 , resulting in a (1.7%) effective income tax rate. This compares to a 12.4% effective income tax rate for the year endedDecember 31, 2019 . The effective income tax rate for the year endedDecember 31, 2019 , would have been 9.5% without the discrete income tax expense of$161 million resulting from the sale of Sands Bethlehem. The income tax benefit for the year endedDecember 31, 2020 , reflects a 17% statutory tax rate on ourSingapore operations, a 21% corporate income tax rate on ourU.S. operations, and a zero percent tax rate on ourMacao gaming operations due to our income tax exemption inMacao . OurU.S. operations recorded a tax benefit associated with the pre-tax book losses incurred for the year endedDecember 31, 2020 . OurU.S. tax benefit was partially offset by a valuation allowance recorded on certainU.S. foreign tax credits, which we no longer expect to utilize due to lower royalty income resulting from a decrease in revenues from ourMacao andSingapore operations compared to prior estimates. OurMacao non-gaming operations had a non-cash income tax expense of$14 million due to the reversal of certain deferred tax assets related to fixed assets, which were primarily disposed of as part of The Londoner Macao project. 54
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The net loss attributable to our noncontrolling interests was$458 million for the year endedDecember 31, 2020 , compared to net income attributable to our noncontrolling interest of$606 million for the year endedDecember 31, 2019 . These amounts were primarily related to the noncontrolling interest of SCL. Additional Information Regarding our Retail Mall Operations The following tables summarize the results of our mall operations on the Cotai Strip and at Marina Bay Sands for the years endedDecember 31, 2020 and 2019: Shoppes at Shoppes at Four Shoppes Shoppes at The Shoppes at Venetian Seasons at Cotai Central Parisian Marina Bay Sands (In millions) For the year endedDecember 31, 2020 Mall revenues: Minimum rents(1)$ 192 $ 121 $ 37 $ 34 $ 137 Overage rents 13 10 4 2 11 Rent concessions(2) (111) (61) (22) (20) (56) Total overage rents and rent concessions (98) (51) (18) (18) (45) CAM, levies and direct recoveries 31 9 18 11 20 Total mall revenues 125 79 37 27 112 Mall operating expenses: Common area maintenance 11 4 6 4 13 Marketing and other direct operating expenses 5 5 2 3 5 Mall operating expenses 16 9 8 7 18 Property taxes(3) 2 - - - 2 Provision for credit losses 1 - 1 - - Mall-related expenses(4)$ 19 $ 9 $ 9 $ 7 $ 20 For the year endedDecember 31, 2019 Mall revenues: Minimum rents(1)$ 194 $ 110 $ 39 $ 37 $ 135 Overage rents 26 31 13 3 24 CAM, levies and direct recoveries 33 10 18 13 26 Total mall revenues 253 151 70 53 185 Mall operating expenses: Common area maintenance 16 6 8 6 17 Marketing and other direct operating expenses 8 3 3 5 6 Mall operating expenses 24 9 11 11 23 Property taxes(3) 1 - - - 6 Provision for credit losses - 1 - - - Mall-related expenses(4)$ 25 $ 10 $ 11 $ 11 $ 29 ____________________ Note: This table excludes the results of our mall operations at Sands Macao and SandsBethlehem , which was sold inMay 2019 . (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 related impact on mall operations. (3) Commercial property that generates rental income is exempt from property tax for the first six years for newly constructed buildings in Cotai. Each property is also eligible to obtain an additional six-year exemption, 55
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provided certain qualifications are met. To date, The Venetian Macao, ThePlaza Macao andFour Seasons Hotel Macao , The Londoner Macao and The Parisian Macao have obtained a second exemption. The exemption for The Venetian Macao and ThePlaza Macao andFour Seasons Hotel Macao expired inAugust 2019 andAugust 2020 , respectively, and the exemption for The Londoner Macao and The Parisian Macao will be expiring inDecember 2027 andSeptember 2028 , respectively. (4) 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 table 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. Year EndedDecember 31, 2019 Compared to the Year EndedDecember 31, 2018 A discussion of changes in our results of operations between 2019 and 2018 has been omitted from this Form 10-K and can be found in "Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations - Year EndedDecember 31, 2019 Compared to the Year EndedDecember 31, 2018 " of the
Company's Annual Report on Form 10-K for the fiscal year ended
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Liquidity and Capital Resources
Cash Flows - Summary
Our cash flows consisted of the following:
Year Ended December 31,
2020 2019 2018
(In millions)
Net cash generated from (used in) operating
activities $ (1,312) $ 3,038 $ 4,701
Cash flows from investing activities:
Net proceeds from sale of Sands Bethlehem - 1,161 -
Capital expenditures (1,330) (1,216) (949)
Proceeds from disposal of property and equipment 1 5 19
Acquisition of intangible assets - (53) -
Net cash used in investing activities (1,329) (103) (930)
Cash flows from financing activities:
Proceeds from exercise of stock options 24 54 79
Repurchase of common stock - (754) (905)
Dividends paid and noncontrolling interest payments (911) (3,000) (2,979)
Proceeds from long-term debt 1,945 4,000 7,593
Repayments of long-term debt (467) (3,536) (5,178)
Payments of financing costs (31) (132) (132)
Net cash generated from (used in) financing
activities 560 (3,368) (1,522)
Effect of exchange rate on cash, cash equivalents
and restricted cash (24) 14 (18)
Increase (decrease) in cash, cash equivalents and
restricted cash and cash equivalents (2,105) (419) 2,231
Cash, cash equivalents and restricted cash and cash equivalents at beginning of year
4,242 4,661 2,430
Cash, cash equivalents and restricted cash and cash equivalents at end of year
$ 2,137 $
4,242
A discussion of changes in cash flows between 2019 and 2018 has been omitted from this Form 10-K and can be found in "Item 7 - Management's Discussion and Analysis of Financial Condition and Results of Operations - Liquidity and Capital Resources" of the Company's Annual Report on Form 10-K for the fiscal year endedDecember 31, 2019 . Cash Flows - Operating Activities Table games play at our properties is conducted on a cash and credit basis, while slot machine play is primarily conducted on a cash basis. Our rooms, food and beverage and other non-gaming revenues are conducted primarily on a cash basis or as a trade receivable, resulting in operating cash flows being generally affected by changes in operating income and accounts receivable. For the year endedDecember 31, 2020 , cash used in operations was$1.31 billion , a decrease of$4.35 billion compared to$3.04 billion of cash flow from operations for the year endedDecember 31, 2019 . The main factor driving this decrease was the impact of the COVID-19 Pandemic on our operations, which significantly reduced visitation to our properties and caused the temporary shutdown of all of our properties at various times during 2020 as described above. The COVID-19 Pandemic impacted our working capital, which was a cash outflow during the year endedDecember 31, 2020 as the amount of receivables collected was less than the settlement of operating accrued liabilities and the outstanding chip liability was significantly reduced in 2020. In addition, cash flow from operations in the prior year were impacted by the land lease payment made in 2019 in connection with theMBS Expansion Project . 57
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Cash Flows - Investing Activities Capital expenditures for the year endedDecember 31, 2020 , totaled$1.33 billion , including$1.06 billion inMacao , which consisted of$739 million for The Londoner Macao,$157 million forThe Plaza Macao and Four Seasons Hotel Macao primarily for The Grand Suites at Four Seasons and$140 million for The Venetian Macao;$164 million inSingapore ;$103 million at ourLas Vegas Operating Properties ; and$5 million for corporate and other activities. Capital expenditures for the year endedDecember 31, 2019 , totaled$1.22 billion , including$762 million inMacao , which consisted of$298 million for ThePlaza Macao andFour Seasons Hotel Macao primarily for The Grand Suites at Four Seasons,$282 million for The Londoner Macao and$131 million for The Venetian Macao;$198 million at ourLas Vegas Operating Properties ;$195 million inSingapore ; and$61 million for corporate and other activities. Cash Flows - Financing Activities Net cash flows generated from financing activities were$560 million for the year endedDecember 31, 2020 , which was primarily attributable to the issuance of$1.50 billion of unsecured notes at SCL, partially offset by$911 million in dividend payments. Net cash flows used in financing activities were$3.37 billion for the year endedDecember 31, 2019 , which was primarily attributable to$3.0 billion in dividend payments,$754 million in common stock repurchases and$132 million in payments of financing costs, partially offset by proceeds of$495 million from the issuance of the 2025 LVSC Senior Notes. As ofDecember 31, 2020 , we had$3.96 billion available for borrowing under ourU.S. ,Macao andSingapore revolving facilities, net of letters of credit. Additionally, we had$2.79 billion available for borrowing under the 2012 Singapore Delayed Draw Term Facility to finance construction costs incurred in connection with theMBS Expansion Project . Capital Financing Overview We fund our development projects primarily through borrowings from our debt instruments (see "Item 8 - Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements - Note 8 - Long-Term Debt") and operating cash flows. InJune 2020 , SCL issued, in a private offering, two series of senior unsecured notes in an aggregate principal amount of$1.50 billion . The net proceeds from the offering were used for incremental liquidity and general corporate purposes. (see "Item 8 - Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements - Note 8 - Long-Term Debt - Corporate andU.S. Related Debt - SCL Senior Notes"). OurU.S. , SCL andSingapore credit facilities, as amended, contain various financial covenants, which include maintaining a maximum leverage ratio or net debt, as defined, to trailing twelve-month adjusted earnings before interest, income taxes, depreciation and amortization, as defined. InSeptember 2020 , LVSC entered into an amendment, pursuant to which lenders, among other things, removed LVSC's requirement to maintain a maximum leverage ratio as of the last day of the fiscal quarter during the period beginning onOctober 31, 2020 , through and includingDecember 31, 2021 . InMarch 2020 , SCL entered into a waiver and amendment request letter, pursuant to which lenders, among other things, waived SCL's requirement to ensure the leverage ratio does not exceed 4.0x and the interest coverage ratio is greater than 2.50x for any period beginning on, and including,January 1, 2020 and ending on, and including,July 1, 2021 (other than with respect to the financial year endedDecember 31, 2019 ). InSeptember 2020 , SCL entered into a waiver extension and amendment request letter, pursuant to which the aforementioned waiver period was extended toJanuary 1, 2022 . InJune 2020 , MBS entered into an amendment letter, such that MBS will not have to comply with the leverage or interest coverage covenants for the financial quarters ending, and including,September 30, 2020 through, and including,December 31, 2021 . Any defaults under our debt agreements would allow the lenders, in each case, to exercise their rights and remedies as defined under their respective agreements. If the lenders were to exercise their rights to accelerate the due dates of the indebtedness outstanding, there can be no assurance we would be able to repay or refinance any 58
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amounts that may become due and payable under such agreements, which could force us to restructure or alter our operations or debt obligations. We held unrestricted cash and cash equivalents of$2.12 billion and restricted cash and cash equivalents of$16 million as ofDecember 31, 2020 , of which approximately$1.21 billion of the unrestricted amount is held by non-U.S. subsidiaries. Of the$1.21 billion , approximately$946 million is available to be repatriated to theU.S. , and we do not expect withholding taxes or other foreign income taxes to apply should these earnings be distributed in the form of dividends or otherwise. The remaining unrestricted amounts held by non-U.S. subsidiaries are not available for repatriation primarily due to dividend requirements to third-party public stockholders in the case of funds being repatriated from SCL. We believe the cash on hand and cash flow generated from operations, as well as the$3.96 billion available for borrowing under ourU.S. ,Macao andSingapore credit facilities, net of outstanding letters of credit, andSGD 3.69 billion (approximately$2.79 billion at exchange rates in effect onDecember 31, 2020 ) under the 2012 Singapore Delayed Draw Term Facility, as ofDecember 31, 2020 , will be sufficient to maintain compliance with the financial covenants of our credit facilities and fund our working capital needs, committed and planned capital expenditures, development opportunities and debt obligations. In the normal course of our activities, we will continue to evaluate global capital markets to consider future opportunities for enhancements of our capital structure. OnJanuary 25, 2021 , we increased the amount available under the SCL revolving credit facility byHKD 3.83 billion (approximately$494 million in exchange rates in effect at the time of transaction) to further enhance our liquidity. Subsequently, onJanuary 29, 2021 SCL drew down$29 million andHKD 2.13 billion (approximately$274 million at exchange rates in effect onJanuary 29, 2021 ) under this facility for general corporate purposes, resulting in remaining available borrowing capacity of$2.21 billion . During the quarter endedMarch 31, 2020 , we paid a quarterly dividend of$0.79 per common share as part of a regular cash dividend program and recorded$603 million as a distribution against retained earnings. OnFebruary 21, 2020 , SCL paid a dividend of0.99 HKD to SCL stockholders (a total of$1.03 billion , of which we retained$717 million during the year endedDecember 31, 2020 ). We have suspended our quarterly dividend program and SCL did not pay a final dividend for 2019 due to the impact of the COVID-19 Pandemic. InJune 2018 , our Board of Directors authorized the repurchase of$2.50 billion of our outstanding common stock, which was to expire inNovember 2020 . InOctober 2020 , our Board of Directors authorized the extension of the expiration date of the remaining repurchase amount of$916 million toNovember 2022 . During the year endedDecember 31, 2020 , no shares of our common stock were repurchased under this program. All share repurchases of our common stock have been recorded as treasury stock. Repurchases of our common stock are made at our discretion in accordance with applicable federal securities laws in the open market or otherwise. The timing and actual number of shares to be repurchased in the future will depend on a variety of factors, including our financial position, earnings, cash flows, legal requirements, other investment opportunities and market conditions. 59
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Aggregate Indebtedness and Other Contractual Obligations
Our total long-term indebtedness and other contractual obligations are
summarized below as of
Payments Due by Period(1)
2021 2022 - 2023 2024 - 2025 Thereafter Total
(In millions)
Long-Term Debt Obligations(2)
LVSC Senior Notes $ - $ -
- 1,800 1,800 3,400 7,000
2012 Singapore Credit Facility 63 126 1,182 1,702 3,073
Singapore Delayed Draw Term Facility - - 16 31 47
Finance Leases, Including Imputed
Interest 14 11 1 - 26
Fixed Interest Payments 476 946 718 614 2,754
Variable Interest Payments(3) 55 107 97 15 274
Contractual Obligations
Operating Leases, Including Imputed
Interest(4) 36 54 46 514 650
Mall Deposits(5) 70 48 21 10 149
Macao Annual Premium(6) 41 21 - - 62
Other(7) 108 136 99 204 547
Total $ 863 $ 3,249 $ 6,230 $ 8,240 $ 18,582
_______________________
(1)As of December 31, 2020 , we had a $71 million liability related to uncertain
tax positions; we do not expect this liability to result in a payment of cash
within the next 12 months. We are unable to reasonably estimate the timing of
the liability in individual years beyond 12 months due to uncertainties in the
timing of the effective settlement of tax positions; therefore, such amounts are
not included in the table.
(2)See "Item 8 - Financial Statements and Supplementary Data - Notes to
Consolidated Financial Statements - Note 8 - Long-Term Debt" for further details
on these financing transactions and "Item 8 - Financial Statements and
Supplementary Data - Notes to Consolidated Financial Statements - Note 13 -
Leases" for further details on finance leases.
(3)Based on the 1-month rate as of December 31, 2020 , Singapore Swap Offer Rate
("SOR") of 0.13% plus the applicable interest rate spread in accordance with the
respective debt agreements.
(4)We are party to certain operating leases for real estate and various
equipment, which primarily include $331 million related to long-term land leases
in Macao with an anticipated lease term of 50-years, $132 million related to a
99-year lease agreement (83 years remaining) for a parking structure located
adjacent to The Venetian Resort Las Vegas and $70 million related to certain
leaseback agreements related to the sale of the Grand Canal Shoppes. See "Item 8
- Financial Statements and Supplementary Data - Notes to Consolidated Financial
Statements - Note 13 - Leases" for further details on operating leases.
(5)Mall deposits consist of refundable security deposits received from mall
tenants.
(6)In addition to the 39% gross gaming win tax in Macao (which is not included
in this table as the amount we pay is variable in nature), we are required to
pay an annual premium with a fixed portion and a variable portion, which is
based on the number and type of gaming tables and gaming machines we operate.
Based on the gaming tables and gaming machines in operation as of December 31,
2020 , the annual premium payable to the Macao government is approximately
$41 million for the year ended December 31, 2021 and approximately $21 million
through the termination of the gaming subconcession in June 2022 .
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(7)Primarily consists of all other non-cancellable contractual obligations and primarily relates to certain hotel and restaurant management and service agreements. The amounts exclude open purchase orders with our suppliers that have not yet been received as these agreements generally allow us the option to cancel, reschedule and adjust terms based on our business needs prior to the delivery of goods or performance of services. Off-Balance Sheet Arrangements We have not entered into any transactions with special purpose entities, nor have we engaged in any derivative transactions. Restrictions on Distributions We are a parent company with limited business operations. Our main asset is the stock and membership interests of our subsidiaries. Certain of our debt instruments contain restrictions that, among other things, limit the ability of certain subsidiaries to incur additional indebtedness, issue disqualified stock or equity interests, pay dividends or make other distributions, repurchase equity interests or certain indebtedness, create certain liens, enter into certain transactions with affiliates, enter into certain mergers or consolidations or sell certain assets of our Company without prior approval of the lenders or noteholders. Special Note Regarding Forward-Looking Statements This report contains forward-looking statements made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements include the discussions of our business strategies and expectations concerning future operations, margins, profitability, liquidity and capital resources. In addition, in certain portions included in this report, the words: "anticipates," "believes," "estimates," "seeks," "expects," "plans," "intends" and similar expressions, as they relate to our Company or management, are intended to identify forward-looking statements. Although we believe these forward-looking statements are reasonable, we cannot assure you any forward-looking statements will prove to be correct. These forward-looking statements involve known and unknown risks, uncertainties and other factors beyond our control, which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. These factors include, among others, the risks associated with: •the uncertainty of the extent, duration and effects of the COVID-19 Pandemic and the response of governments and other third parties, including government-mandated property closures, increased operational regulatory requirements or travel restrictions, on our business, results of operations, cash flows, liquidity and development prospects; •general economic and business conditions in theU.S. and internationally, which may impact levels of disposable income, consumer spending, group meeting business, pricing of hotel rooms and retail and mall tenant sales; •disruptions or reductions in travel and our operations due to natural or man-made disasters, pandemics, epidemics or outbreaks of infectious or contagious diseases, political instability, civil unrest, terrorist activity or war; •the uncertainty of consumer behavior related to discretionary spending and vacationing at ourIntegrated Resorts inMacao ,Singapore andLas Vegas ; •the extensive regulations to which we are subject and the costs of compliance or failure to comply with such regulations; •our ability to maintain our gaming licenses and subconcession inMacao ,Singapore andLas Vegas ; •new developments, construction projects and ventures, including our Cotai Strip developments andMBS Expansion Project ; •regulatory policies inChina or other countries in which our customers reside, or where we have operations, including visa restrictions limiting the number of visits or the length of stay for visitors fromChina to 61
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Macao , restrictions on foreign currency exchange or importation of currency, and the judicial enforcement of gaming debts; •the ability of our subsidiaries to make distribution payments to us; •our leverage, debt service and debt covenant compliance, including the pledge of certain of our assets (other than our equity interests in our subsidiaries) as security for our indebtedness and ability to refinance our debt obligations as they come due or to obtain sufficient funding for our planned, or any future, development projects; •fluctuations in currency exchange rates and interest rates; •increased competition for labor and materials due to planned construction projects inMacao andSingapore and quota limits on the hiring of foreign workers; •our ability to compete for limited management and labor resources inMacao andSingapore , and policies of those governments may also affect our ability to employ imported managers or labor from other countries; •our dependence upon properties primarily inMacao ,Singapore andLas Vegas for all of our cash flow; •the passage of new legislation and receipt of governmental approvals for our operations inMacao andSingapore and other jurisdictions where we are planning to operate; •our insurance coverage may not be adequate to cover all possible losses that our properties could suffer and our insurance costs may increase in the future; •our ability to collect gaming receivables from our credit players; •our relationship with gaming promoters inMacao ; •our dependence on chance and theoretical win rates; •fraud and cheating; •our ability to establish and protect our intellectual property rights; •conflicts of interest that arise because certain of our directors and officers are also directors of SCL; •government regulation of the casino industry (as well as new laws and regulations and changes to existing laws and regulations), including gaming license regulation, the requirement for certain beneficial owners of our securities to be found suitable by gaming authorities, the legalization of gaming in other jurisdictions and regulation of gaming on the internet; •increased competition inMacao andLas Vegas , including recent and upcoming increases in hotel rooms, meeting and convention space, retail space, potential additional gaming licenses and online gaming; •the popularity ofMacao ,Singapore andLas Vegas as convention and trade show destinations; •new taxes, changes to existing tax rates or proposed changes in tax legislation and the impact ofU.S. tax reform; •the continued services of our key officers; •any potential conflict between the interests of our Principal Stockholders and us; •labor actions and other labor problems; •our failure to maintain the integrity of our information and information systems or comply with applicable privacy and data security requirements and regulations could harm our reputation and adversely affect our business; •the completion of infrastructure projects inMacao ; •our relationship with Brookfield or any successor owner of theGrand Canal Shoppes; and •the outcome of any ongoing and future litigation. 62
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All future written and verbal forward-looking statements attributable to us or any person acting on our behalf are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. New risks and uncertainties arise from time to time, and it is impossible for us to predict these events or how they may affect us. Readers are cautioned not to place undue reliance on these forward-looking statements. We assume no obligation to update any forward-looking statements after the date of this report as a result of new information, future events or developments, except as required by federal securities laws. Critical Accounting Policies and Estimates The preparation of our consolidated financial statements in conformity with accounting principles generally accepted inthe United States of America requires our management to make estimates and judgments that affect the reported amounts of assets and liabilities, revenues and expenses, and related disclosures of contingent assets and liabilities. These estimates and judgments are based on historical information, information currently available to us and on various other assumptions management believes to be reasonable under the circumstances. Actual results could vary from those estimates and we may change our estimates and assumptions in future evaluations. Changes in these estimates and assumptions may have a material effect on our results of operations and financial condition. We believe the critical accounting policies discussed below affect our more significant judgments and estimates used in the preparation of our consolidated financial statements. Provision for Expected Credit Losses We maintain a provision for expected credit losses on casino, hotel and mall receivables and regularly evaluate the balances. We apply standard reserve percentages to aged account balances, which are grouped based on shared credit risk characteristics and days past due. The reserve percentages are based on estimated loss rates supported by historical observed default rates over the expected life of the receivable and are adjusted for forward-looking information. We also specifically analyze the collectability of each account with a balance over a specified dollar amount, based upon the age of the account, the customer's financial condition, collection history and any other known information and adjust the aforementioned reserve with the results from the individual reserve analysis. We also monitor regional and global economic conditions and forecasts, which include the impact of the COVID-19 Pandemic, in our evaluation of the adequacy of the recorded reserves. During the year endedDecember 31, 2020 , there has been a delay in payments on casino receivables due to the inability of patrons to travel to our properties or to accomplish financial transactions due to the travel restrictions caused by the COVID-19 Pandemic. The collection of casino receivables has also been impacted by liquidity issues faced by certain patrons also stemming from the COVID-19 Pandemic. We have increased the provision for credit losses in each jurisdiction accordingly to account for the expected credit losses due to the COVID-19 Pandemic. Although we believe the provision on our casino receivables is adequate as ofDecember 31, 2020 , it is possible our provisions could increase if we experience further delays on payments from patrons. Account balances are written off against the provision when we believe it is probable the receivable will not be recovered. Credit or marker play was 24.0%, 14.6% and 68.8% of table games play at ourMacao properties,Marina Bay Sands andLas Vegas Operating Properties , respectively, during the year endedDecember 31, 2020 . Our provision for casino credit losses was 58.3% and 32.3% of gross casino receivables as ofDecember 31, 2020 and 2019, respectively. The credit extended to gaming promoters can be offset by the commissions payable to said gaming promoters, which is considered in the establishment of the provision for credit losses. Our provision for credit losses from our hotel and other receivables is not material. Litigation Accrual We are subject to various claims and legal actions. We estimate the accruals for these claims and legal actions based on all relevant facts and circumstances currently available and include such accruals in other accrued liabilities in the consolidated balance sheets when it is determined such contingencies are both probable and reasonably estimable. Property and Equipment As ofDecember 31, 2020 , we had net property and equipment of$15.11 billion , representing 72.6% of our total assets. We depreciate property and equipment on a straight-line basis over their estimated useful lives. The estimated useful lives are based on the nature of the assets as well as current operating strategy and legal 63
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considerations, such as contractual life. Future events, such as property expansions, property developments, new competition or new regulations, could result in a change in the manner in which we use certain assets requiring a change in the estimated useful lives of such assets. The estimated useful lives of assets are periodically reviewed and adjusted as necessary on a prospective basis. For assets to be held and used (including projects under development), fixed assets are reviewed for impairment whenever indicators of impairment exist. If an indicator of impairment exists, we first group our assets with other assets and liabilities at the lowest level for which identifiable cash flows are largely independent of the cash flows of other assets and liabilities (the "asset group"). Secondly, we estimate the undiscounted future cash flows directly associated with and expected to arise from the completion, use and eventual disposition of such asset group. We estimate the undiscounted cash flows over the remaining useful life of the primary asset within the asset group. If the undiscounted cash flows exceed the carrying value, no impairment is indicated. If the undiscounted cash flows do not exceed the carrying value, then an impairment is measured based on fair value compared to carrying value, with fair value typically based on a discounted cash flow model. If an asset is still under development, future cash flows include remaining construction costs. To estimate the undiscounted cash flows of our asset groups, we consider all potential cash flows scenarios, which are probability weighted based on management's estimates given current conditions. Determining the recoverability of our asset groups is judgmental in nature and requires the use of significant estimates and assumptions, including estimated cash flows, probability weighting of potential scenarios, costs to complete construction for assets under development, growth rates and future market conditions, among others. Future changes to our estimates and assumptions based upon changes in macro-economic factors, regulatory environments, operating results or management's intentions may result in future changes to the recoverability of our asset groups. Due to the substantial reduction in cash flows generated from our operating properties and the ongoing travel restrictions due to the COVID-19 Pandemic, we determined a triggering event occurred in 2020 and an impairment assessment was warranted for our asset groups inMacao ,Singapore andLas Vegas . We tested our long-lived assets held for use at our operating properties inMacao ,Singapore andLas Vegas for recoverability as ofDecember 31, 2020 , resulting in no impairment as the estimated undiscounted future cash flows exceeded their carrying values. We believe we made reasonable estimates and judgments in performing the analysis in light of the uncertainties surrounding the COVID-19 Pandemic; however, should the effects of the COVID-19 Pandemic persist for a prolonged duration and projected operating results further decline in future periods, we could be required to recognize an impairment loss. For assets to be held for sale, the fixed assets (the "disposal group") are measured at the lower of their carrying amount or fair value less cost to sell. Losses are recognized for any initial or subsequent write-down to fair value less cost to sell, while gains are recognized for any subsequent increase in fair value less cost to sell, but not in excess of the cumulative loss previously recognized. Any gains or losses not previously recognized that result from the sale of the disposal group shall be recognized at the date of sale. Fixed assets are not depreciated while classified as held for sale. Income Taxes We are subject to income taxes in theU.S. (including federal and state) and numerous foreign jurisdictions in which we operate. We record income taxes under the asset and liability method, whereby deferred tax assets and liabilities are recognized based on the future tax consequences attributable to temporary differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, and attributable to operating loss and tax credit carryforwards. Our foreign andU.S. tax rate differential reflects the fact thatU.S. tax rates are higher than the statutory tax rates inSingapore andMacao of 17% and 12%, respectively. InAugust 2018 , we received an additional exemption fromMacao's corporate income tax on profits generated by the operation of casino games of chance for the periodJanuary 1, 2019 throughJune 26, 2022 , the date our subconcession agreement expires. Additionally, we entered into an agreement with theMacao government inApril 2019 , effective throughJune 26, 2022 , providing for an annual payment of38 million patacas (approximately$5 million at exchange rates in effect onDecember 31, 2020 ) that is a substitution for a 12% tax otherwise due from VML shareholders on dividend distributions paid from VML gaming 64
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profits. We intend to request extensions of these tax arrangements; however, there is no assurance we will receive these extensions. Accounting standards regarding income taxes require a reduction of the carrying amounts of deferred tax assets by a valuation allowance, if based on the available evidence, it is "more-likely-than-not" such assets will not be realized. Accordingly, the need to establish valuation allowances for deferred tax assets is assessed at each reporting period based on a "more-likely-than-not" realization threshold. This assessment considers, among other matters, the nature, frequency and severity of current and cumulative losses, forecasts of future profitability, the duration of statutory carryforward periods, our experience with operating loss and tax credit carryforwards not expiring and tax planning strategies. We recorded a valuation allowance on the net deferred tax assets of certain foreign jurisdictions of$342 million and$279 million as ofDecember 31, 2020 and 2019, respectively, and a valuation allowance on certain net deferred tax assets of ourU.S. operations of$4.58 billion and$4.51 billion as ofDecember 31, 2020 and 2019, respectively. Due to the impact of the COVID-19 Pandemic and the resulting reduction in estimated royalty income from an expected decrease in ourMacao andSingapore operations, we recorded a valuation allowance on certainU.S. foreign tax credits, which we no longer expect to utilize during the period 2021 through 2027 before their expiration. We believe we made reasonable estimates and judgments in performing the analysis in light of the uncertainties surrounding the COVID-19 Pandemic; however, should the effects of the COVID-19 Pandemic persist for a prolonged duration, we could be required to record additional valuation allowances. Management will reassess the realization of deferred tax assets each reporting period and consider the scheduled reversal of deferred tax liabilities, sources of taxable income and tax planning strategies. To the extent the financial results of these operations improve and it becomes "more-likely-than-not" the deferred tax assets are realizable, we will be able to reduce the valuation allowance in the period such determination is made, as appropriate. Significant judgment is required in evaluating our tax positions and determining our provision for income taxes. During the ordinary course of business, there are many transactions for which the ultimate tax determination is uncertain. Accounting standards regarding uncertainty in income taxes provides a two-step approach to recognizing and measuring uncertain tax positions. The first step is to evaluate the tax position for recognition by determining if the weight of available evidence indicates it is "more-likely-than-not" the position will be sustained on audit, including resolution of related appeals or litigation processes, if any. The second step is to measure the tax benefit as the largest amount that is more than 50% likely, based solely on the technical merits, of being sustained on examinations. We recorded unrecognized tax benefits of$131 million and$134 million as ofDecember 31, 2020 and 2019, respectively. We consider many factors when evaluating and estimating our tax positions and tax benefits, which may require periodic adjustments and for which actual outcomes may be different. Our major tax jurisdictions are theU.S. ,Macao , andSingapore . We could be subject to examination for tax years beginning in 2016 inMacao andSingapore and tax years 2010 through 2015 and 2017 through 2019 in theU.S. U.S. tax reform made significant changes toU.S. income tax laws including lowering theU.S. corporate tax rate to 21% effective beginning in 2018 and transitioning from a worldwide tax system to a territorial tax system resulting in dividends from our foreign subsidiaries not being subject toU.S. income tax and therefore, no longer generatingU.S. foreign tax credits. Recent Accounting Pronouncements See related disclosure at "Item 8 - Financial Statements and Supplementary Data - Notes to Consolidated Financial Statements - Note 2 - Summary of Significant Accounting Policies - Recent Accounting Pronouncements." ITEM 7A. - QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK Market risk is the risk of loss arising from adverse changes in market rates and prices, such as interest rates, foreign currency exchange rates and commodity prices. Our primary exposures to market risk are interest rate risk associated with our long-term debt and foreign currency exchange rate risk associated with our operations outsidethe United States , which we may manage through the use of futures, options, caps, forward contracts and similar 65
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instruments. We do not hold or issue financial instruments for trading purposes and do not enter into derivative transactions that would be considered speculative positions. As ofDecember 31, 2020 , the estimated fair value of our long-term debt was approximately$15.15 billion , compared to its contractual value of$14.12 billion . The estimated fair value of our long-term debt is based on recent trades, if available, and indicative pricing from market information (level 2 inputs). A hypothetical 100 basis point change in market rates would cause the fair value of our long-term debt to change by$557 million . A hypothetical 100 basis point change in SOR would cause our annual interest cost on our long-term debt to change by approximately$31 million . Foreign currency transaction gains for the year endedDecember 31, 2020 , were$22 million primarily due toU.S. dollar denominated debt issued by SCL and bySingapore dollar denominated intercompany debt reported inU.S. dollars. We may be vulnerable to changes in theU.S. dollar/SGD andU.S. dollar/pataca exchange rates. Based on balances as ofDecember 31, 2020 , a hypothetical 10% weakening of theU.S. dollar/SGD exchange rate would cause a foreign currency transaction loss of approximately$23 million and a hypothetical 1% weakening of theU.S. dollar/pataca exchange rate would cause a foreign currency transaction loss of approximately$67 million . The pataca is pegged to theHong Kong dollar and theHong Kong dollar is pegged to theU.S. dollar (within a narrow range). We maintain a significant amount of our operating funds in the same currencies in which we have obligations thereby reducing our exposure to currency fluctuations. 66
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