Las Vegas Sands Reports Fourth Quarter 2020 Results

LAS VEGAS, Jan. 27, 2021 /PRNewswire/ -- Las Vegas Sands Corp. (NYSE: LVS), the world's leading developer and operator of convention-based Integrated Resorts, while continuing to mourn the loss of its visionary founder, Mr. Sheldon G. Adelson, today reported financial results for the quarter ended December 31, 2020.

"Mr. Adelson's vision and leadership created Las Vegas Sands and the convention-based Integrated Resort business model that forms the bedrock of the company's success," said Mr. Robert G. Goldstein, Chairman and Chief Executive Officer. "His impact will live on through the company's 50,000 team members and the iconic properties he developed around the world. These last few weeks since Sheldon's passing have been difficult for all of us, but his commitment to investing aggressively to build iconic resorts that deliver economic benefits to our host communities, the core of the company's operating strategy, remains firmly in place. I am deeply committed to continuing the execution of the strategy he created, and confident that we will deliver growth in the years ahead while honoring his legacy and realizing his vision for the creation of additional Integrated Resorts in new markets."

"Mr. Adelson established the roadmap for the future of this company, and that roadmap remains unchanged," said Patrick Dumont, President and Chief Operating Officer. "I am dedicated to working with Rob and our leadership team to make our strategic objectives a reality. Our path forward is clear and remains true to the principles our founder was committed to for so many years – we will continue supporting our people and the local communities in which we operate, reinvesting in our current markets, producing strong returns for our shareholders and aggressively pursuing new development opportunities."

"Turning to our financial results, I am pleased to share that the recovery process from the Covid-19 pandemic continues to progress in both Macao and Singapore" said Mr. Goldstein. "Our greatest priority as the recovery continues remains our deep commitment to supporting our team members and to helping those in need in each of our local communities of Macao, Singapore and Las Vegas."

"We remain optimistic about the eventual recovery of travel and tourism spending across our markets. We are fortunate that our financial strength supports our previously announced capital expenditure programs in both Macao and Singapore, as well as our pursuit of growth opportunities in new markets."

Net revenue was $1.15 billion, a decrease of 67.3% from the prior year quarter. Operating loss was $211 million, compared to operating income of $934 million in the prior year quarter. Net loss in the fourth quarter of 2020 was $376 million, compared to net income of $783 million in the fourth quarter of 2019. Consolidated adjusted property EBITDA was $141 million, compared to $1.39 billion in the prior year quarter.

Full year 2020 operating loss was $1.69 billion, compared to operating income of $3.70 billion in 2019. Net loss attributable to Las Vegas Sands was $1.69 billion, or $(2.21) per diluted share, in 2020, compared to net income of $2.70 billion, or $3.50 per diluted share, in 2019.

Sands China Ltd. Consolidated Financial Results
On a GAAP basis, total net revenues for SCL decreased 69.9%, compared to the fourth quarter of 2019, to $672 million. Net loss for SCL was $246 million, compared to net income of $513 million in the fourth quarter of 2019.

On a GAAP basis, full year 2020 total net revenues for SCL decreased 80.8%, compared to the full year 2019, to $1.69 billion. Net loss for SCL was $1.52 billion in 2020, compared to net income of $2.04 billion in 2019.

Other Factors Affecting Earnings
Interest expense, net of amounts capitalized, was $150 million for the fourth quarter of 2020, compared to $134 million in the prior year quarter. Our weighted average debt balance increased compared to the prior year quarter due to the issuance of $1.50 billion of senior notes by SCL in June 2020, while our weighted average borrowing cost in the fourth quarter of 2020 was 4.4%, compared to 4.3% during the fourth quarter of 2019.

Our income tax expense for the fourth quarter of 2020 was $8 million, compared to $65 million in the prior year quarter. The income tax expense for the fourth quarter of 2020 was primarily driven by a 17% statutory tax rate on our Singapore operations partially offset by an income tax benefit driven by pre-tax losses experienced by our U.S. operations.

Balance Sheet Items
Unrestricted cash balances as of December 31, 2020 were $2.12 billion.

SCL entered into an agreement with lenders to increase commitments under its revolving credit facility by the U.S. dollar equivalent of $494 million based on exchange rates at the time of the transaction, which became effective on January 25, 2021. After taking into account the aforementioned increase, the total available borrowing capacity under the SCL revolving credit facility was $2.51 billion and the company has access to a total of $4.46 billion available for borrowing under our U.S., SCL and Singapore revolving credit facilities, net of outstanding letters of credit.

As of December 31, 2020, total debt outstanding, excluding finance leases, was $13.98 billion.

Capital Expenditures
Capital expenditures during the fourth quarter totaled $252 million, including construction, development and maintenance activities of $201 million in Macao, $27 million at Marina Bay Sands and $24 million in Las Vegas.

Conference Call Information
The company will host a conference call to discuss the company's results on Wednesday, January 27, 2021 at 1:30 p.m. Pacific Time. Interested parties may listen to the conference call through a webcast available on the company's website at www.sands.com.

About Las Vegas Sands Corp. (NYSE: LVS)
Las Vegas Sands is the world's preeminent developer and operator of world-class Integrated Resorts. We deliver unrivaled economic benefits to the communities in which we operate.

Sands created the meetings, incentives, convention and exhibition (MICE)-based Integrated Resort. Our industry-leading Integrated Resorts provide substantial contributions to our host communities including growth in leisure and business tourism, sustained job creation and ongoing financial opportunities for local small and medium-sized businesses.

Our properties include The Venetian Resort and Sands Expo in Las Vegas, and the iconic Marina Bay Sands in Singapore. Through majority ownership in Sands China Ltd., we have developed the largest portfolio of properties on the Cotai Strip in Macao, including The Venetian Macao, The Plaza and Four Seasons Hotel Macao, The Londoner Macao and The Parisian Macao, as well as the Sands Macao on the Macao Peninsula.

Sands is dedicated to being a good corporate citizen, anchored by the core tenets of serving people, planet and communities. We deliver a great working environment for our team members worldwide, drive social impact through the Sands Cares community engagement and charitable giving program and lead in environmental performance through the award-winning Sands ECO360 global sustainability program. To learn more, please visit www.sands.com.

Forward-Looking Statements

This press release contains forward-looking statements made pursuant to the Safe Harbor Provisions of the Private Securities Litigation Reform Act of 1995. Forward-looking statements involve a number of risks, uncertainties or other factors beyond the company's control, which may cause material differences in actual results, performance or other expectations. These factors include, but are not limited to: 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 conditions; disruptions or reductions in travel and our operations due to natural or man-made disasters, pandemics, epidemics, or outbreaks of infectious or contagious diseases; our ability to invest in future growth opportunities; execute our previously announced capital expenditure programs in both Macao and Singapore, and produce future returns; new development, construction and ventures; government regulation; risks relating to our gaming licenses and subconcession; our subsidiaries' ability to make distribution payments to us; substantial leverage and debt service; fluctuations in currency exchange rates and interest rates; gaming promoters; competition; tax law changes; transportation infrastructure in Macao; political instability, civil unrest, terrorist acts or war; legalization of gaming; insurance; and other factors detailed in the reports filed by Las Vegas Sands Corp. with the Securities and Exchange Commission. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date thereof. Las Vegas Sands Corp. assumes no obligation to update such information.

Contacts:

Investment Community:
Daniel Briggs
(702) 414-1221

Media:
Ron Reese
(702) 414-3607

Las Vegas Sands Corp.
Fourth Quarter 2020 Results
Non-GAAP Measures

Within the company's fourth quarter and full year 2020 press release, the company makes reference to certain non-GAAP financial measures that supplement the company's consolidated financial information prepared in accordance with GAAP including "adjusted net income/loss," "adjusted earnings/loss per diluted share," and "consolidated adjusted property EBITDA," which have directly comparable GAAP financial measures along with "adjusted property EBITDA margin," "hold-normalized adjusted property EBITDA," "hold-normalized adjusted property EBITDA margin," "hold-normalized adjusted net income/loss," and "hold-normalized adjusted earnings/loss per diluted share." The company believes these measures represent important internal measures of financial performance. Set forth in the financial schedules accompanying this release and presentations included on the company's website are reconciliations of the non-GAAP financial measures to the most directly comparable GAAP financial measures. The non-GAAP financial measure disclosure by the company has limitations and should not be considered a substitute for, or superior to, the financial measures prepared in accordance with GAAP. The definitions of our non-GAAP financial measures and the specific reasons why the company's management believes the presentation of the non-GAAP financial measures provides useful information to investors regarding the company's financial condition, results of operations and cash flows are presented below.

The following non-GAAP financial measures are used by management, as well as industry analysts, to evaluate the company's operations and operating performance. These non-GAAP financial measures are presented so investors have the same financial data management uses in evaluating financial performance with the belief it will assist the investment community in properly assessing the underlying financial performance of the company on a year-over-year and a quarter sequential basis.

Adjusted net income/loss, which is a non-GAAP financial measure, excludes certain nonrecurring corporate expenses, pre-opening expense, development expense, gain or loss on disposal or impairment of assets, loss on modification or early retirement of debt and other income or expense, attributable to Las Vegas Sands, net of income tax. Adjusted net income/loss and adjusted earnings/loss per diluted share are presented as supplemental disclosures as management believes they are (1) each widely used measures of performance by industry analysts and investors and (2) a principal basis for valuation of Integrated Resort companies, as these non-GAAP measures are considered by many as alternative measures on which to base expectations for future results. These measures also form the basis of certain internal management performance expectations.

Consolidated adjusted property EBITDA, which is a non-GAAP financial measure, 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. 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 casinos on a more stand-alone basis, Integrated Resort companies, including Las Vegas Sands, 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/loss 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. The company has significant uses of cash flow, including capital expenditures, dividend payments, interest payments, debt principal payments and income tax payments, which are not reflected in consolidated adjusted property EBITDA. Not all companies calculate adjusted property EBITDA in the same manner. As a result, consolidated adjusted property EBITDA as presented by Las Vegas Sands may not be directly comparable to similarly titled measures presented by other companies.

Hold-normalized adjusted property EBITDA, a supplemental non-GAAP financial measure, that, in addition to the aforementioned reasons for the presentation of consolidated adjusted property EBITDA, is presented to adjust for the impact of certain variances in table games' win percentages, which can vary from period to period. Hold-normalized adjusted property EBITDA is based on applying a Rolling Chip win percentage of 3.30% to the Rolling Chip volume for the quarter if the actual win percentage is outside the expected range of 3.15% to 3.45% for our Macao and Singapore properties and applying a win percentage of 22.0% for Baccarat and 20.0% for non-Baccarat games to the respective table games drops for the quarter if the actual win percentages are outside the expected ranges of 18.0% to 26.0% for Baccarat and 16.0% to 24.0% for non-Baccarat at our Las Vegas properties. We do not present adjustments for Non-Rolling Chip drop for our table games play at our Macao and Singapore properties, nor for slots at any of our properties. Hold-normalized adjusted property EBITDA is also adjusted for the estimated gaming taxes, commissions paid, bad debt expense, discounts and other incentives that would have been incurred when applying the win percentages noted above to the respective gaming volumes. The hold-normalized adjusted property EBITDA measure presents a consistent measure for evaluating the operating performance of our properties from period to period.

Hold-normalized adjusted net income/loss and hold-normalized adjusted earnings/loss per diluted share are additional supplemental non-GAAP financial measures that, in addition to the aforementioned reasons for the presentation of adjusted net income/loss and adjusted earnings/loss per diluted share, are presented to adjust for the impact of certain variances in table games' win percentages, which can vary from period to period.

The company may also present the above items on a constant currency basis. This information is a non-GAAP financial measure that is calculated by translating current quarter local currency amounts to U.S. dollars based on prior period exchange rates. These amounts are compared to the prior period to derive non-GAAP constant-currency growth/decline. Management considers non-GAAP constant-currency growth/decline to be a useful metric to investors and management as it allows a more direct comparison of current performance to historical performance.

The company also makes reference to adjusted property EBITDA margin and hold-normalized adjusted property EBITDA margin, which are calculated using the aforementioned non-GAAP financial measures.