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." 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 the outbreak of a pandemic onMarch 12, 2020 (the "COVID-19 Pandemic"). Governments around the world mandated actions to contain the spread of the virus that included stay-at-home orders, quarantines, capacity limits, closures of non-essential businesses and significant restrictions on travel. The government actions varied based upon the extent and severity of the COVID-19 Pandemic within their respective countries and jurisdictions. Visitation to theMacao Special Administrative Region ("Macao") ofthe People's Republic of China has decreased substantially, driven by various government policies limiting travel. As of the date of this report, other than people from mainlandChina who may enterMacao without quarantine subject to them holding the appropriate travel documents, a negative COVID-19 test result and a green health-code, there remains in place a complete ban on entry or a need to undergo enhanced quarantine requirements depending on the person's residency and recent travel history.Macao began administering the COVID-19 vaccine to front-line health workers onFebruary 9, 2021 , and to the general population onMarch 3, 2021 . OnMarch 3, 2021 , the negative COVID-19 test requirement to enter casinos was removed. Various other health safeguards implemented by theMacao government remain in place, including mandatory mask protection, limitation on the number of seats per table game, slot machine spacing and temperature checks. Management is currently unable to determine when the remaining measures will be eased or cease to be necessary. All businesses including non-essential businesses are allowed to remain open. In support of theMacao government's initiatives to fight the COVID-19 Pandemic, we provided one tower (approximately 2,000 hotel rooms) at the Sheraton GrandMacao to theMacao government to house individualswho returned toMacao for quarantine purposes. This tower has been utilized for quarantine purposes on several occasions during 2020 and 2021. During the three months endedMarch 31, 2021 , ourMacao operations remained open. This compared to the same period in 2020 when ourMacao operations were suspended fromFebruary 5, 2020 toFebruary 20, 2020 due to a government mandate, except for operations at The Londoner Macao, which resumed onFebruary 27, 2020 . Operating hours at restaurants across ourMacao properties are continuously being adjusted in line with movements in guest visitation. The majority of retail outlets in ourMacao shopping malls are open with reduced operating hours. The timing and manner in which these areas will return to full operation are currently unknown. OurMacao ferry operations betweenMacao andHong Kong remain suspended. The timing and manner in which our normal ferry operations will be able to resume are currently unknown. During the three months endedMarch 31, 2020 ourMacao casino operations were suspended fromFebruary 5, 2020 toFebruary 20, 2020 due to a government mandate, except for operations at The Londoner Macao, which resumed onFebruary 27, 2020 . OurMacao operations have been significantly impacted by the lack of visitation toMacao . TheMacao government announced total visitation from mainlandChina toMacao decreased 31.8% during the three months endedMarch 31, 2021 , as compared to the same period in 2020. TheMacao government also announced gross gaming revenue decreased 22.5% during the three months endedMarch 31, 2021 , as compared to the same period in 2020. 25 -------------------------------------------------------------------------------- Table of Contents As of the date of this report, entry intoSingapore is largely limited toSingapore citizens and permanent residents, with short-term visits allowed from specified countries subject to certain requirements and health control measures. Additionally, there are no stay-at-home orders or curfews except for certain individuals arriving intoSingapore who are subject to quarantine. All operations are currently subject to limited capacities and other social distancing measures.Singapore started administering the COVID-19 vaccine onDecember 30, 2020 to front-line health workers and continues to roll-out the vaccine in phases to other groups based on priority. TheSingapore Tourism Board (the "STB") announced onMarch 24, 2021 , that effectiveApril 24, 2021 , business-to-business events, sporting events and live performances, with as many as 750 people, will be allowed, provided event organizers implement pre-event testing. The date on which nightlife venues may reopen is unknown at this time. As a result of the border closures, visitation toMarina Bay Sands declined. The STB announced for the three months endedMarch 31, 2021 , total visitation toSingapore decreased approximately 97.4%, as compared to the same period in 2020. InLas Vegas , beginningMarch 15, 2021 , the limit for public events was increased to the lesser of 250 people or 50% of the venue's capacity, provided social distancing measures and various safety and related protocols are followed. Large gatherings such as meetings, incentives, conventions and exhibitions ("MICE") for more than 250 people, up to a maximum of 50% of the venue's capacity, may be held subject to approval. Food and beverage establishments and the gaming floor are subject to a 50% capacity limit, compared to a previous capacity limit of 35%. OnApril 13, 2021 , theGovernor of Nevada announced his goal to have allNevada counties open to 100% capacity byJune 1, 2021 . Decisions on social distancing and capacity limits will transition to local authorities in each Nevada county onMay 1, 2021 . Capacity and mitigation measures for gaming areas within theState of Nevada will remain under the authority of theNevada Gaming Control Board . The mask requirement is a statewide standard that will continue. Other than the aforementioned restrictions, no stay-at-home orders, curfews or quarantines are in place. All businesses including non-essential businesses are allowed to remain open.Las Vegas started administering the COVID-19 vaccine in early 2021 and, effectiveApril 5, 2021 , all individuals, 16 and older are eligible to receive the vaccine. During the three months endedMarch 31, 2021 , ourLas Vegas Operating Properties were open subject to limited capacities. This compares to the same period in 2020 when ourLas Vegas Operating Properties operations were suspended due to a government mandate onMarch 18, 2020 through the end of the quarter. Visitation to ourLas Vegas Operating Properties has declined during the three months endedMarch 31, 2021 . TheLas Vegas Convention and Visitors Authority announced for the months ended January andFebruary 2021 , visitation toLas Vegas decreased 63.5% and 53.8%, respectively, as compared to the same periods in 2020. TheLas Vegas Convention and Visitors Authority also announced for the months ended January andFebruary 2021 , gross gaming revenue for theLas Vegas Strip decreased 43.8% and 41.6%, respectively, as compared to the same periods in 2020. In connection with 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. If ourIntegrated Resorts are not permitted to resume normal operations, travel restrictions such as those related to the China Individual Visit Scheme and other global restrictions on inbound travel from other countries are not modified or eliminated 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 each of our properties are 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 the COVID-19 Pandemic changes over time, which could significantly alter our current operations. 26 -------------------------------------------------------------------------------- Table of Contents 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$2.07 billion and access to$1.50 billion ,$2.00 billion and$440 million of available borrowing capacity from our LVSC Revolving Facility, 2018 SCL Revolving Facility and the 2012 Singapore Revolving Facility, respectively, and3.69 billion Singapore dollars ("SGD," approximately$2.74 billion at exchange rates in effect onMarch 31, 2021 ) under ourSingapore Delayed Draw Term Facility, exclusively for capital expenditures for the Marina Bay Sands expansion project, as ofMarch 31, 2021 . 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. 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 . OnMarch 2, 2021 , we entered into definitive agreements to sell ourLas Vegas real property and operations, including The Venetian Resort Las Vegas and theSands Expo and Convention Center , for a total enterprise value of$6.25 billion toPioneer OpCo, LLC , an affiliate of certain funds managed by affiliates of Apollo Global Management, Inc, and VICI Properties L.P, a subsidiary of VICI Properties Inc. The closing of the transaction is subject to regulatory review and other closing conditions. 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 2020 Annual Report on Form 10-K filed onFebruary 5, 2021 . There were no newly identified significant accounting estimates during the three months endedMarch 31, 2021 , nor were there any material changes to the critical accounting policies and estimates discussed in our 2020 Annual Report. Recent Accounting Pronouncements See related disclosure at "Item 1 - Financial Statements - Notes to Condensed Consolidated Financial Statements - Note 1 - Organization and Business of Company - Recent Accounting Pronouncements." Operating Results Key Operating Revenue Measurements Operating revenues at The Venetian Macao, The Londoner Macao, The ParisianMacao , ThePlaza Macao and Four Seasons Macao,Marina Bay Sands and ourLas Vegas Operating Properties are dependent upon the volume of patronswho stay at the hotel, which affects the price charged for hotel rooms and our gaming volume. Operating revenues at Sands Macao are principally driven by the volume of gaming patronswho visit the property on a daily basis. Management utilizes the following volume and pricing measures in order to evaluate past performance and assist in forecasting future revenues. The various volume measurements indicate our ability to attract patrons to ourIntegrated Resorts . In casino operations, win and hold percentages indicate the amount of revenue to be expected based on volume. In hotel operations, average daily rate and revenue per available room indicate the demand for rooms and our ability to capture that demand. In mall operations, base rent per square foot indicates our ability to attract and maintain profitable tenants for our leasable space. The following are the key measurements we use to evaluate operating revenues: Casino revenue measurements forMacao andSingapore :Macao andSingapore table games are segregated into two groups: Rolling Chip play (composed of VIP players) and Non-Rolling Chip play (mostly non-VIP players). The volume measurement for Rolling Chip play is non-negotiable gaming chips wagered and lost. The volume measurement for Non-Rolling Chip play is table games drop ("drop"), which is net markers issued (credit 27 -------------------------------------------------------------------------------- Table of Contents 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 25.7%, 22.5%, 22.7%, 22.5%, 16.3% and 18.4% 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 4.0%, 4.1%, 3.8%, 9.0%, 3.3% and 4.4% 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 , 15.9% and 12.1%, respectively, of our table games play was conducted on a credit basis for the three months endedMarch 31, 2021 . 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 (credit instruments) 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. Our slot machines have produced a trailing 12-month hold percentage of 8.0%. Actual win and hold percentages may vary from our expected win percentage and the trailing 12-month win and hold percentages. Similar toMacao andSingapore , slot machine play is generally conducted on a cash basis. Approximately 62.7% of our table games play at ourLas Vegas Operating Properties , for the three months endedMarch 31, 2021 , was conducted on a credit 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 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 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. 28 -------------------------------------------------------------------------------- Table of Contents Three Months EndedMarch 31, 2021 Compared to the Three Months EndedMarch 31, 2020 Summary Financial Results Our financial results were adversely impacted by decreased visitation at our properties due to the COVID-19 Pandemic, as well as by our properties temporarily operating at a reduced capacity due to social distancing measures. See "COVID-19 Pandemic" for further information. Net revenues for the three months endedMarch 31, 2021 , decreased 15.6% to$1.20 billion , compared to$1.42 billion for the three months endedMarch 31, 2020 . Operating loss was$96 million compared to operating income of$6 million for the three months endedMarch 31, 2020 . Net loss was$280 million for the three months endedMarch 31, 2021 , compared to net loss of$92 million for the three months endedMarch 31, 2020 . Operating Revenues Our net revenues consisted of the following: Three Months Ended March 31, Percent 2021 2020 Change (Dollars in millions) Casino $ 865$ 1,075 (19.5) % Rooms 96 141 (31.9) % Food and beverage 56 64 (12.5) % Mall 156 103 51.5 % Convention, retail and other 23 34 (32.4) % Total net revenues$ 1,196 $ 1,417 (15.6) % Consolidated net revenues were$1.20 billion for the three months endedMarch 31, 2021 , a decrease of$221 million compared to$1.42 billion for the three months endedMarch 31, 2020 . The decrease was across our jurisdictions and properties with decreases of$186 million and$35 million at Marina Bay Sands and ourMacao operations, respectively. These decreases were driven by the COVID-19 Pandemic described above and the related reduction in visitation due to travel restrictions and our properties operating at a reduced capacity due to social distancing measures. Net casino revenues decreased$210 million compared to the three months endedMarch 31, 2020 . The change was driven by a$136 million decrease atMarina Bay Sands due to decreases in Non-Rolling Chip drop and Rolling Chip volume. Casino revenues at ourMacao operations decreased$74 million due to decreases in Rolling Chip volume, Non-Rolling Chip drop and slot handle. These decreases were driven by lower visitation across our properties due the impact of the COVID-19 Pandemic described above. The following table summarizes the results of our casino activity: Three Months Ended March 31, 2021 2020 Change (Dollars in millions) Macao Operations: The Venetian Macao Total net casino revenues$ 266 $ 251 6.0 % Non-Rolling Chip drop$ 908 $ 817 11.1 % Non-Rolling Chip win percentage 27.4 % 27.0 % 0.4 pts Rolling Chip volume$ 1,231 $ 2,270 (45.8) % Rolling Chip win percentage 4.43 % 3.03 % 1.40 pts Slot handle$ 462 $ 438 5.5 % Slot hold percentage 4.0 % 4.5 % (0.5) pts 29
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Three Months Ended March 31,
2021 2020 Change
(Dollars in millions)
The Londoner Macao
Total net casino revenues $ 91 $ 123 (26.0) %
Non-Rolling Chip drop $ 408 $ 556 (26.6) %
Non-Rolling Chip win percentage 21.7 % 22.0 % (0.3) pts
Rolling Chip volume $ 523 $ 167 213.2 %
Rolling Chip win percentage 3.71 % 5.85 % (2.14) pts
Slot handle $ 197 $ 367 (46.3) %
Slot hold percentage 3.9 % 4.4 % (0.5) pts
The Parisian Macao
Total net casino revenues $ 59 $ 115 (48.7) %
Non-Rolling Chip drop $ 300 $ 390 (23.1) %
Non-Rolling Chip win percentage 23.0 % 23.8 % (0.8) pts
Rolling Chip volume $ 114 $ 1,890 (94.0) %
Rolling Chip win percentage (3.01) % 2.49 % (5.50) pts
Slot handle $ 223 $ 432 (48.4) %
Slot hold percentage 3.4 % 3.5 % (0.1) pts
The Plaza Macao and Four Seasons Macao
Total net casino revenues $ 115 $ 83 38.6 %
Non-Rolling Chip drop $ 256 $ 210 21.9 %
Non-Rolling Chip win percentage 24.1 % 29.9 % (5.8) pts
Rolling Chip volume $ 1,436 $ 1,626 (11.7) %
Rolling Chip win percentage 5.93 % 2.84 % 3.09 pts
Slot handle $ 4 $ 37 (89.2) %
Slot hold percentage 10.8 % 4.7 % 6.1 pts
Sands Macao
Total net casino revenues $ 31 $ 64 (51.6) %
Non-Rolling Chip drop $ 122 $ 250 (51.2) %
Non-Rolling Chip win percentage 15.1 % 20.1 % (5.0) pts
Rolling Chip volume $ 484 $ 507 (4.5) %
Rolling Chip win percentage 4.34 % 4.37 % (0.03) pts
Slot handle $ 158 $ 276 (42.8) %
Slot hold percentage 3.4 % 3.0 % 0.4 pts
Singapore Operations:
Marina Bay Sands
Total net casino revenues $ 303 $ 439 (31.0) %
Non-Rolling Chip drop $ 674 $ 1,077 (37.4) %
Non-Rolling Chip win percentage 19.1 % 19.8 % (0.7) pts
Rolling Chip volume $ 1,512 $ 6,639 (77.2) %
Rolling Chip win percentage 5.59 % 3.53 % 2.06 pts
Slot handle $ 3,745 $ 2,870 30.5 %
Slot hold percentage 4.2 % 4.3 % (0.1) pts
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Three Months Ended March 31,
2021 2020 Change
(Dollars in millions)
U.S. Operations:
Las Vegas Operating Properties (1)
Total net casino revenues $ 53 $ 102 (48.0) %
Table games drop $ 335 $ 446 (24.9) %
Table games win percentage 9.3 % 19.9 % (10.6) pts
Slot handle $ 625 $ 603 3.6 %
Slot hold percentage 8.1 % 8.2 % (0.1) pts
__________________________
(1) The Las Vegas Operating Properties are classified as a discontinued
operation held for sale.
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 $45 million compared to the three months ended March 31,
2020 . The decrease was primarily due to reduced room rates driven by lower
visitation across our properties. The following table summarizes the results of
our room activity:
Three Months Ended March 31,
2021 2020 Change
(Room revenues in millions)
Macao Operations:
The Venetian Macao
Total room revenues $ 19 $ 21 (9.5) %
Occupancy rate 47.2 % 39.2 % 8.0 pts
Average daily room rate (ADR) $ 157 $ 238 (34.0) %
Revenue per available room (RevPAR) $ 74 $ 93 (20.4) %
The Londoner Macao
Total room revenues $ 19 $ 27 (29.6) %
Occupancy rate 35.5 % 38.1 % (2.6) pts
Average daily room rate (ADR) $ 173 $ 175 (1.1) %
Revenue per available room (RevPAR) $ 61 $ 67 (9.0) %
The Parisian Macao
Total room revenues $ 12 $ 13 (7.7) %
Occupancy rate 46.7 % 40.3 % 6.4 pts
Average daily room rate (ADR) $ 118 $ 169 (30.2) %
Revenue per available room (RevPAR) $ 55 $ 68 (19.1) %
The Plaza Macao and Four Seasons Macao
Total room revenues $ 11 $ 4 175.0 %
Occupancy rate 43.7 % 48.4 % (4.7) pts
Average daily room rate (ADR) $ 432 $ 329 31.3 %
Revenue per available room (RevPAR) $ 189 $ 159 18.9 %
Sands Macao
Total room revenues $ 3 $ 2 50.0 %
Occupancy rate 71.5 % 59.8 % 11.7 pts
Average daily room rate (ADR) $ 138 $ 179 (22.9) %
Revenue per available room (RevPAR) $ 99 $ 107 (7.5) %
Singapore Operations:
Marina Bay Sands
Total room revenues $ 32 $ 74 (56.8) %
Occupancy rate 63.0 % 81.0 % (18.0) pts
Average daily room rate (ADR) $ 228 $ 417 (45.3) %
Revenue per available room (RevPAR) $ 143 $ 338 (57.7) %
U.S. Operations:
Las Vegas Operating Properties (1)
Total room revenues $ 45 $ 127 (64.6) %
Occupancy rate 42.6 % 87.2 % (44.6) pts
Average daily room rate (ADR) $ 185 $ 266 (30.5) %
Revenue per available room (RevPAR) $ 79 $ 232 (65.9) %
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(1)
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Food and beverage revenues decreased $8 million compared to the three months
ended March 31, 2020 . The decrease was due to an $8 million decrease at Marina
Bay Sands as a result of the COVID-19 Pandemic described above.
Mall revenues increased $53 million compared to the three months ended March 31,
2020 . The increase was primarily due to a decrease of $45 million in rent
concessions granted to our mall tenants in Macao and Singapore compared to the
three months ended March 31, 2020 , as well as a $12 million increase in turnover
rents.
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 in Macao and in
Singapore :
Three Months Ended March 31,
2021 2020 Change
(Mall revenues in millions)
Macao Operations:
Shoppes at Venetian
Total mall revenues $ 46 $ 29 58.6 %
Mall gross leasable area (in square feet) 812,936 812,934 - %
Occupancy 79.9 % 90.5 % (10.6) pts
Base rent per square foot $ 301 $ 281 7.1 %
Tenant sales per square foot(1) $ 940 $ 1,460 (35.6) %
Shoppes at Londoner(2)
Total mall revenues $ 14 $ 9 55.6 %
Mall gross leasable area (in square feet) 515,958 525,247 (1.8) %
Occupancy 81.0 % 88.3 % (7.3) pts
Base rent per square foot $ 102 $ 103 (1.0) %
Tenant sales per square foot(1) $ 576 $ 780 (26.2) %
Shoppes at Parisian
Total mall revenues $ 10 $ 6 66.7 %
Mall gross leasable area (in square feet) 296,145 295,920 0.1 %
Occupancy 79.8 % 87.9 % (8.1) pts
Base rent per square foot $ 151 $ 148 2.0 %
Tenant sales per square foot(1) $ 422 $ 687 (38.6) %
Shoppes at Four Seasons
Total mall revenues $ 39 $ 17 129.4 %
Mall gross leasable area (in square feet) 244,104 242,425 0.7 %
Occupancy 94.0 % 93.2 % 0.8 pts
Base rent per square foot $ 543 $ 552 (1.6) %
Tenant sales per square foot(1) $ 3,665 $ 4,781 (23.3) %
Singapore Operations:
The Shoppes at Marina Bay Sands
Total mall revenues $ 47 $ 42 11.9 %
Mall gross leasable area (in square feet) 620,297 593,756 4.5 %
Occupancy 98.9 % 96.4 % 2.5 pts
Base rent per square foot $ 264 $ 264 - %
Tenant sales per square foot(1) $ 1,048 $ 1,917 (45.3) %
__________________________
Note: This table excludes the results of our mall operations at Sands Macao.
(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.
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(2) The Shoppes at Londoner will feature up to an estimated 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 $11 million compared to the
three months ended March 31, 2020 , primarily driven by decreases of $5 million
and $4 million at Marina Bay Sands and our Macao properties, respectively, as a
result of decreased visitation across our properties and the cancellation of
MICE events due to the COVID-19 Pandemic described above.
Operating Expenses
Our operating expenses consisted of the following:
Three Months Ended March 31,
Percent
2021 2020 Change
(Dollars in millions)
Casino $ 578 $ 648 (10.8) %
Rooms 42 46 (8.7) %
Food and beverage 71 82 (13.4) %
Mall 15 17 (11.8) %
Convention, retail and other 22 35 (37.1) %
Provision for credit losses 4 14 (71.4) %
General and administrative 225 229 (1.7) %
Corporate 49 59 (16.9) %
Pre-opening 5 5 - %
Development 9 6 50.0 %
Depreciation and amortization 255 253 0.8 %
Amortization of leasehold interests in land 14 14 - %
Loss on disposal or impairment of assets 3 3 - %
Total operating expenses $ 1,292 $ 1,411 (8.4) %
Operating expenses were $1.29 billion for the three months ended March 31, 2021 ,
a decrease of $119 million compared to $1.41 billion for the three months ended
March 31, 2020 , primarily driven by a decrease in casino expenses of $70
million . Additionally, convention, retail and other expenses decreased $13
million and food and beverage expenses decreased $11 million . The decreases were
mainly driven by decreased visitation due to 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. We have also implemented
payroll cost saving initiatives across each of our properties, including
utilization of paid time off and voluntary unpaid leave.
Casino expenses decreased $70 million compared to the three months ended March
31, 2020 . The decrease was primarily attributable to a $59 million decrease in
gaming taxes resulting from decreased casino revenues, as previously described.
Food and beverage expenses decreased $11 million compared to the three months
ended March 31, 2020 , due to decreases of $6 million and $5 million at Marina
Bay Sands and our Macao properties, respectively. These decreases are consistent
with the reduction in food and beverage revenues.
Convention, retail and other expenses decreased $13 million compared to the
three months ended March 31, 2020 , primarily driven by an $8 million decrease in
ferry expenses resulting from the suspension of ferry operations between Macao
and Hong Kong , which began on January 30, 2020 and continues to remain suspended
in response to the COVID-19 Pandemic. Additionally, expenses at our Macao
properties decreased $6 million , consistent with the decrease in convention,
retail and other revenues discussed above.
Provision for credit losses decreased $10 million compared to the three months
ended March 31, 2020 , primarily due to the collection of previously reserved
patron balances. 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
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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.
Corporate expenses decreased $10 million compared to the three months ended
March 31, 2020 , due to decreases of $8 million in payroll expense and $2 million
in travel expenses.
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.
Segment Adjusted Property EBITDA
The following table summarizes information related to our segments (see "Item
1 - Financial Statements - Notes to Condensed Consolidated Financial
Statements - Note 9 - Segment Information" for a reconciliation of consolidated
adjusted property EBITDA to net income/loss):
Three Months Ended March 31,
Percent
2021 2020 Change
(Dollars in millions)
Macao:
The Venetian Macao $ 82 $ 49 67.3 %
The Londoner Macao (23) - N.M.
The Parisian Macao (8) (3) 166.7 %
The Plaza Macao and Four Seasons Macao 70 28 150.0 %
Sands Macao (18) (1) 1,700.0 %
Ferry Operations and Other (3) (6) (50.0) %
100 67 49.3 %
Marina Bay Sands 144 282 (48.9) %
Consolidated adjusted property EBITDA (1) $ 244 $ 349 (30.1) %
Las Vegas Operating Properties(2) (47) 88 (153.4) %
__________________________
N.M. Not Meaningful
(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.
(2)The Las Vegas Operating Properties are classified as a discontinued operation
held for sale.
Adjusted property EBITDA at our Macao operations increased $33 million compared
with the three months ended March 31, 2020 , primarily due to an increase in
revenue from mall operations, as well as decreased payroll
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costs driven by the implementation of payroll cost saving initiatives noted
above, partially offset by decreased casino and room revenues driven by
decreased visitation at our properties due to the COVID-19 Pandemic.
Adjusted property EBITDA at Marina Bay Sands decreased $138 million compared to
the three months ended March 31, 2020 , primarily due to decreased casino
revenues, driven by decreased visitation at our property due to the COVID-19
Pandemic.
Discontinued Operations
Adjusted property EBITDA at our Las Vegas Operating Properties decreased $135
million compared to the three months ended March 31, 2020 , primarily due to no
MICE events during the three months ended March 31, 2021 , and decreased room and
casino revenues, driven by decreased visitation to our property and State of
Nevada mandated limits on public gatherings due to the COVID-19 Pandemic.
Interest Expense
The following table summarizes information related to interest expense:
Three Months Ended March 31,
2021 2020
(Dollars in millions)
Interest cost $ 158 $ 132
Less - capitalized interest (4) (4)
Interest expense, net $ 154 $ 128
Weighted average total debt balance $ 14,340 $ 12,483
Weighted average interest rate 4.4 %
4.2 %
Interest cost increased$26 million compared to the three months endedMarch 31, 2020 , resulting from an increase in our weighted average total debt balance due to the issuance of the 2026 and 2030 SCL Senior Notes issued onJune 4, 2020 , and a draw on the SCL revolver during the three months endedMarch 31, 2021 . The weighted average interest rate also increased to 4.4% for the three months endedMarch 31, 2021 , compared to 4.2% for the three months endedMarch 31, 2020 . Other Factors Affecting Earnings Other expense was$17 million for the three months endedMarch 31, 2021 , compared to other income of$39 million for the three months endedMarch 31, 2020 . Other expense during the three months endedMarch 31, 2021 , consisted primarily of$16 million of foreign transaction losses, driven byU.S. dollar-denominated debt held by SCL. Other income during the three months endedMarch 31, 2020 , consisted primarily of$38 million of foreign currency transaction gains primarily driven by theU.S. dollar-denominated debt held by SCL andSingapore dollar-denominated intercompany debt reported inU.S. dollars. Our income tax expense was$14 million on a loss before income taxes of$266 million for the three months endedMarch 31, 2021 , resulting in a 5.3% effective income tax rate. This compares to a 31.4% effective income tax rate for the three months endedMarch 31, 2020 . The income tax expense for the three months endedMarch 31, 2021 , 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 receive an income tax exemption on gaming operations throughJune 2022 . During the three months endedMarch 31, 2021 , we recorded a valuation allowance of$20 million related to certainU.S. foreign tax credits, which we no longer expect to utilize due to lower forecastedU.S. taxable income in years following the sale of the Las Vegas Operations. The net loss attributable to our noncontrolling interests was$64 million for the three months endedMarch 31, 2021 , compared to$50 million for the three months endedMarch 31, 2020 . These amounts are related to the noncontrolling interest of SCL. Additional Information Regarding our Retail Mall Operations We own and operate retail malls at ourIntegrated Resorts at The Venetian Macao, ThePlaza Macao and Four Seasons Macao, The Londoner Macao, The Parisian Macao andMarina Bay Sands . Management believes being in 36 -------------------------------------------------------------------------------- Table of Contents the retail mall business and, specifically, owning some of the largest retail properties inAsia will provide meaningful value for us, particularly as the retail market inAsia continues to grow. Our malls are designed to complement our other unique amenities and service offerings provided by ourIntegrated Resorts . Our strategy is to seek out desirable tenants that appeal to our patrons and provide a wide variety of shopping options. We generate our mall revenues primarily from leases with tenants through minimum base rents, overage rents, and reimbursements for common area maintenance ("CAM") and other expenditures. The following tables summarize the results of our mall operations on the Cotai Strip and at Marina Bay Sands for the three months endedMarch 31, 2021 and 2020: Shoppes at Shoppes at Four Shoppes at Shoppes at The Shoppes at Marina Venetian Seasons Londoner Parisian Bay Sands (In millions) For the three months endedMarch 31, 2021 Mall revenues: Minimum rents(1)$ 46 $ 31 $ 8 $ 9 $ 37 Overage rents 2 6 4 1 4 Rent concessions(2) (9) - (2) (2) (6) Other(3) - - - - 6 Total overage rents, rent concessions and other (7) 6 2 (1) 4 CAM, levies and direct recoveries 7 2 4 2 6 Total mall revenues 46 39 14 10 47 Mall operating expenses: Common area maintenance 3 1 1 1 4 Marketing and other direct operating expenses 1 1 1 - 2 Mall operating expenses 4 2 2 1 6 Property taxes(4) 1 - - - 2 Recovery of credit losses (1) - - - - Mall-related expenses(5) $ 4 $ 2 $ 2 $ 1 $ 8 For the three months endedMarch 31, 2020 Mall revenues: Minimum rents(1)$ 50 $ 30 $ 10 $ 9 $ 35 Overage rents - 1 1 - 3 Rent concessions(2) (29) (17) (6) (5) (2) Total overage rents and rent concessions (29) (16) (5) (5) 1 CAM, levies and direct recoveries 8 3 4 2 6 Total mall revenues 29 17 9 6 42 Mall operating expenses: Common area maintenance 3 1 1 1 4 Marketing and other direct operating expenses 2 1 1 1 2 Mall operating expenses 5 2 2 2 6 Property taxes(4) - - - - 1 Provision for credit losses 3 1 1 1 - Mall-related expenses(5) $ 8 $ 3 $ 3 $ 3 $ 7 ____________________ 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 forMarina Bay Sands of$6 million related to a grant provided by theSingapore government to lessors to support small and medium enterprises impacted by the COVID-19 Pandemic in connection with their rent obligations. 37 -------------------------------------------------------------------------------- Table of Contents (4)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, provided certain qualifications are met. To date, The Venetian Macao, ThePlaza Macao and Four Seasons Macao, The Londoner Macao and The Parisian Macao have obtained a second 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 Londoner Macao and The Parisian Macao will be expiring inDecember 2027 andSeptember 2028 , respectively. (5)Mall-related expenses consist of CAM, marketing fees and other direct operating expenses, property taxes and provision for credit losses, but excludes depreciation and amortization and general and administrative costs. It is common in the mall operating industry for companies to disclose mall net operating income ("NOI") as a useful supplemental measure of a mall's operating performance. Because NOI excludes general and administrative expenses, interest expense, impairment losses, depreciation and amortization, gains and losses from property dispositions, allocations to noncontrolling interests and provision for income taxes, it provides a performance measure that, when compared year over year, reflects the revenues and expenses directly associated with owning and operating commercial real estate properties and the impact on operations from trends in occupancy rates, rental rates and operating costs. In the tables above, we believe taking total mall revenues less mall-related expenses provides an operating performance measure for our malls. Other mall operating companies may use different methodologies for deriving mall-related expenses. As such, this calculation may not be comparable to the NOI of other mall operating companies. 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 ourIntegrated Resorts .Macao Our construction work on the conversion of Sands Cotai Central into the new destinationIntegrated Resort , The Londoner Macao, is progressing. This project is being delivered in phases, which started in 2020 and will continue throughout 2021. Upon completion, The Londoner Macao will feature new attractions and features internally and externally fromLondon , including some ofLondon's most recognizable landmarks, such as the Houses ofParliament andThe Elizabeth Tower (commonly known as "Big Ben").The Londoner Macao Hotel opened inJanuary 2021 with approximately 600 London-themed suites, including 14 exclusive Suites byDavid Beckham .The Integrated Resort will also feature the Londoner Court with approximately 370 luxury suites; construction of the Londoner Court is now complete and is expected to open in 2021. Our retail offerings will be expanded and rebranded as the Shoppes at Londoner. We anticipate the total costs associated with The Londoner Macao development projects described above and the recently completed The Grand Suites at Four Seasons to be approximately$2.2 billion . The ultimate costs and completion dates for The Londoner Macao development are subject to change as we complete the project. Singapore InApril 2019 , our wholly owned subsidiary,Marina Bay Sands Pte. Ltd. ("MBS") and theSingapore Tourism Board (the "STB") entered into a development agreement (the "Development Agreement") pursuant to which MBS will construct a development, theMBS Expansion Project , which will include a hotel tower with a rooftop attraction, convention and meeting facilities and a state-of-the-art live entertainment arena with approximately 15,000 seats. The Development Agreement provides for a total project cost of approximatelySGD 4.5 billion (approximately$3.3 billion at exchange rates in effect onMarch 31, 2021 ). The amount of the total project cost will be finalized as we complete design and development and begin construction. In connection with the Development Agreement, MBS entered into a lease with the STB for the parcels of land underlying the project. InApril 2019 and in connection with the lease, MBS provided various governmental agencies inSingapore the required premiums, deposits, stamp duty, goods and services tax and other fees in an aggregate amount of approximatelySGD 1.54 billion (approximately$1.14 billion at exchange rates in effect at the time of the transaction). 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 Development Agreement. OnJune 18, 2020 , we 38
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Table of Contents further amended the 2012 Singapore Credit Facility, which, among other things, extends toJune 30, 2021 , the deadline for delivering the construction costs estimate and the construction schedule for theMBS Expansion Project . Other We continue to evaluate additional development projects in each of our markets and pursue new development opportunities globally. Liquidity and Capital Resources Cash Flows - Summary Our cash flows consisted of the following:
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