Las Vegas Sands Reports Fourth Quarter and Full Year 2015 Results

LAS VEGAS, Jan. 27, 2016 /PRNewswire/ -- Las Vegas Sands Corp. (NYSE: LVS) today reported financial results for the quarter ended December 31, 2015. 

Fourth Quarter Overview

Mr. Sheldon G. Adelson, chairman and chief executive officer, said, "The operating environment in Macao remained challenging during the quarter; however, our focus on the higher margin mass and non-gaming segments and the geographic diversification of our cash flows allowed us to once again deliver in excess of one billion U.S. dollars of adjusted property EBITDA during the quarter.  We remain sharply focused on the consistent execution of our global growth strategy, which leverages the power of our unique convention-based Integrated Resort business model. 

"Our convention-based Integrated Resort business model appeals to the broadest set of customers, generates the most diversified set of cash flows and delivers the industry's highest revenue and profit from non-gaming segments, while bringing unsurpassed economic and diversification benefits to the regions in which we operate.  We remain confident in our ability to both further extend our global leadership position and deliver strong growth in the future. 

"The prudent management of our cash flow, including the ability to increase the return of capital to shareholders while maintaining a strong balance sheet and ample liquidity to invest in future growth opportunities, remains a cornerstone of our strategy."

The company paid a recurring quarterly dividend of $0.65 per common share during the quarter, an increase of 30.0% compared to the fourth quarter of 2014. The company also announced that its next recurring quarterly dividend of $0.72 per common share will be paid on March 31, 2016, to Las Vegas Sands shareholders of record on March 22, 2016.  That dividend represents an increase of 10.8% compared to the dividend paid in the first quarter of 2015.  Additionally, since the inception of the company's share repurchase program in June 2013, the company has returned $2.44 billion to shareholders through the repurchase of 35.4 million shares, including $60.0 million of common stock (1.3 million shares at a weighted average price of $44.55) during the quarter ended December 31, 2015.  

Mr. Adelson added, "In Macao, notwithstanding an operating environment that remains challenging,  we delivered $575.3 million in adjusted property EBITDA across our Macao property portfolio during the quarter, our strongest quarterly performance of the year.  We remain confident that our market-leading Cotai Strip properties, which will be complemented in the future by The Parisian Macao, targeted to open in late 2016, will continue to provide the economic benefits of diversification to Macao, help attract greater numbers of business and leisure travelers, and provide an outstanding and diversified platform for growth in the years ahead."

At Marina Bay Sands in Singapore, we continue to attract visitors from across the region to Singapore, which enabled us to generate another record mass gaming win-per-day in local currency terms. While the impact of the stronger U.S. Dollar and low win percentage on rolling table games play each negatively impacted our reported financial results for the quarter, both gaming volumes and our non-gaming segments remain resilient.  On a constant currency basis, hold-normalized adjusted property EBITDA, excluding the impact of a $90.1 million property tax refund received in the prior year, increased 11.8%.

At the Venetian, Palazzo and Sands Expo Center in Las Vegas, a 22.2% year-over-year increase in RevPAR to $220 drove a 24.9% increase in adjusted property EBITDA.     

Company-Wide Operating Results

Net revenue for the fourth quarter of 2015 decreased 16.2% to $2.86 billion, compared to $3.42 billion in the fourth quarter of 2014. Consolidated adjusted property EBITDA of $1.05 billion decreased 21.9% in the fourth quarter of 2015, compared to the year-ago quarter.  On a hold-normalized basis, adjusted property EBITDA decreased 16.0% to $1.07 billion in the fourth quarter of 2015. 

On a GAAP (Generally Accepted Accounting Principles) basis, operating income in the fourth quarter of 2015 decreased 31.3% to $702.0 million, compared to $1.02 billion in the fourth quarter of 2014.  The decrease in operating income was principally due to softer results across the company's Macao property portfolio and a $90.1 million benefit in the fourth quarter of 2014 relating to a property tax refund at Marina Bay Sands in Singapore. 

On a GAAP basis, net income attributable to Las Vegas Sands in the fourth quarter of 2015 decreased 35.4% to $465.8 million, compared to $721.3 million in the fourth quarter of 2014, while diluted earnings per share in the fourth quarter of 2015 decreased 34.4% to $0.59, compared to $0.90 in the prior-year quarter. The decrease in net income attributable to Las Vegas Sands reflected the decline in operating income described above, partially offset by a $47.5 million decrease in net income attributable to noncontrolling interests. 

Adjusted net income (see Note 1) decreased to $492.4 million, or $0.62 per diluted share, compared to $734.2 million, or $0.92 per diluted share, in the fourth quarter of 2014.

Full year 2015 net revenue decreased 19.9% to $11.69 billion, compared to $14.58 billion in 2014. Consolidated adjusted property EBITDA in 2015 decreased 23.1% to $4.17 billion, compared to $5.42 billion in 2014. Consolidated adjusted property EBITDA margin decreased 150 basis points to 35.7% in 2015, compared to 37.2% in 2014.  Negative operating leverage from declining revenues in Macao were the primary reason for the EBITDA margin contraction in 2015, despite the partial off-set provided by the implementation of cost-control programs.  

Full year adjusted net income (see Note 1) was $2.03 billion in 2015, or $2.55 per diluted share, compared to $2.89 billion, or $3.58 per diluted share, in 2014.

On a GAAP basis, full year 2015 operating income decreased 30.7% to $2.84 billion, compared to $4.10 billion in 2014.  The decrease in operating income was principally due to weaker operating results across our Macao property portfolio. Net income attributable to Las Vegas Sands decreased 30.8% to $1.97 billion, or $2.47 per diluted share, in 2015, compared to $2.84 billion, or $3.52 per diluted share, in 2014. The decline in net income attributable to Las Vegas Sands reflected the decrease in operating income described above, partially offset by a decrease in net income attributable to noncontrolling interests.    

Sands China Ltd. Consolidated Financial Results

On a GAAP basis, total net revenues for Sands China Ltd. decreased 21.7% to $1.66 billion in the fourth quarter of 2015, compared to $2.12 billion in the fourth quarter of 2014. Adjusted property EBITDA for Sands China Ltd. decreased 18.5% to $581.2 million in the fourth quarter of 2015, compared to $713.2 million in the fourth quarter of 2014. Net income for Sands China Ltd. decreased 29.3% to $378.4 million in the fourth quarter of 2015, compared to $535.3 million in the fourth quarter of 2014.

On a GAAP basis, full year 2015 total net revenues for Sands China Ltd. decreased 28.3% to $6.86 billion, compared to $9.57 billion in 2014. Adjusted property EBITDA for Sands China Ltd. decreased 31.9% to $2.22 billion in 2015, compared to $3.26 billion in 2014. Net income for Sands China Ltd. decreased 43.1% to $1.45 billion in 2015, compared to $2.55 billion in 2014.

The Venetian Macao Fourth Quarter Operating Results

Despite the softer gaming market in Macao, The Venetian Macao continued to enjoy Macao market-leading visitation and financial performance. The property generated adjusted property EBITDA of $297.3 million in the fourth quarter with an EBITDA margin of 39.1%.  Non-Rolling Chip drop was $1.74 billion for the quarter, with a Non-Rolling Chip win percentage of 23.4%.  Rolling Chip volume during the quarter decreased 20.8% to $8.0 billion.  Rolling Chip win percentage was 3.34% in the quarter, above the 2.61% experienced in the prior-year quarter. Slot handle was $1.01 billion. 

The following table summarizes the key operating results for The Venetian Macao for the fourth quarter of 2015 compared to the fourth quarter of 2014:

Sands Cotai Central Fourth Quarter Operating Results

Net revenues and adjusted property EBITDA for the fourth quarter of 2015 at Sands Cotai Central were $505.7 million and $160.9 million, respectively, resulting in an EBITDA margin of 31.8%.

Non-Rolling Chip drop was $1.46 billion in the fourth quarter with a Non-Rolling Chip win percentage of 21.3%.  Rolling Chip volume was $4.13 billion for the quarter with a Rolling Chip win percentage of 2.62%.  Slot handle was $1.48 billion for the quarter. Hotel occupancy was 85.4% with ADR of $151. 

The following table summarizes our key operating results for Sands Cotai Central for the fourth quarter of 2015 compared to the fourth quarter of 2014:

Four Seasons Hotel Macao and Plaza Casino Fourth Quarter Operating Results

The Four Seasons Hotel Macao and Plaza Casino generated adjusted property EBITDA of $65.8 million in the fourth quarter of 2015, a decrease of 29.0% compared to the year-ago quarter.  Non-Rolling Chip drop was $271.6 million, while Non-Rolling Chip win percentage was 20.1%.  Rolling Chip volume was $2.43 billion for the quarter. Rolling Chip win percentage was 3.43% in the quarter, above the 3.12% experienced in the prior-year quarter. Slot handle was $103.5 million during the quarter.

The following table summarizes our key operating results for the Four Seasons Hotel Macao and Plaza Casino for the fourth quarter of 2015 compared to the fourth quarter of 2014:

Sands Macao Fourth Quarter Operating Results

Sands Macao's adjusted property EBITDA was $51.3 million. Non-Rolling Chip drop was $716.4 million during the quarter, while slot handle was $661.5 million. Rolling Chip volume was $2.70 billion for the quarter. The property realized 3.18% win on Rolling Chip volume during the quarter, below the 3.57% generated in the year-ago quarter. 

The following table summarizes our key operating results for Sands Macao for the fourth quarter of 2015 compared to the fourth quarter of 2014:

Marina Bay Sands Fourth Quarter Operating Results

The impact of the stronger U.S. dollar negatively impacted the financial results and key performance indicators of Marina Bay Sands in Singapore in the current quarter.  Low win percentage on table games play also negatively impacted our reported financial results. The property generated adjusted property EBITDA of $338.2 million.  On a hold-normalized basis, adjusted property EBITDA was $374.8 million. On a constant-currency basis, hold-normalized adjusted property EBITDA decreased 10.1%. On a constant-currency basis, and excluding the property tax refund from the prior year quarter, hold-normalized adjusted property EBITDA increased 11.8%.  

Rolling Chip win percentage of 2.39% in the fourth quarter of 2015 was below the expected range and considerably below the 3.58% achieved in the fourth quarter of 2014. Rolling Chip volume was $10.12 billion for the quarter.

Non-Rolling Chip drop was $976.4 million during the quarter with a Non-Rolling Chip win percentage of 28.5%. Slot handle increased 6.3% to $3.32 billion for the quarter compared to the year-ago quarter. Total mass win-per-day during the quarter was $4.6 million and was an all-time quarterly record for the property in local currency terms.

ADR decreased to $392 during the quarter and occupancy decreased to 96.6%, resulting in a RevPAR decrease of 8.7% compared to the same quarter last year.  

The following table summarizes our key operating results for Marina Bay Sands for the fourth quarter of 2015 compared to the fourth quarter of 2014:

Las Vegas Operations Fourth Quarter Operating Results

Adjusted property EBITDA at The Venetian Las Vegas and The Palazzo, including the Sands Expo and Convention Center, was $97.4 million for the quarter, an increase of 24.9% compared to the fourth quarter of 2014.  On a hold-normalized basis, adjusted property EBITDA in the quarter increased 20.3% year-over-year to $105.4 million.  RevPAR increased 22.2% year-over-year to $220 in the quarter, reflecting a 7.7% increase in ADR to $239 and an 11.0 percentage point increase in occupancy to 92.1%.  Table games drop decreased 13.8% in the quarter to $472.5 million, reflecting softer Baccarat play, while slot handle increased 16.0% to $678.0 million.

The following table summarizes our key operating results for our Las Vegas operations for the fourth quarter of 2015 compared to the fourth quarter of 2014:

Sands Bethlehem Fourth Quarter Operating Results

Net revenues for Sands Bethlehem in Pennsylvania increased 4.7% to $139.9 million and adjusted property EBITDA decreased 5.2% to $34.3 million for the quarter. Table games drop increased 4.6% to $292.9 million for the quarter, while table games win percentage was 18.3%, slightly below the 18.7% realized in the fourth quarter of 2014. Slot handle increased 5.1% year-over-year to $1.06 billion for the quarter with a slot hold percentage of 6.9%.

The following table summarizes our key operating results for Sands Bethlehem for the fourth quarter of 2015 compared to the fourth quarter of 2014:

Asian Retail Mall Operations

Gross revenue from tenants in the company's retail malls on Macao's Cotai Strip (The Venetian Macao, Four Seasons Macao and Sands Cotai Central) and Marina Bay Sands in Singapore was $159.3 million for the fourth quarter of 2015, a decrease of 8.2% compared to the fourth quarter of 2014.  Operating profit derived from these retail mall assets decreased 8.6% year-over-year to $143.8 million.

Other Factors Affecting Earnings

Other Asia, which is principally comprised of our CotaiJet ferry operation, reflected adjusted property EBITDA of $6.1 million during the quarter, compared to $2.2 million in the fourth quarter of 2014.

Pre-opening expense, which was principally related to the St. Regis tower at Sands Cotai Central - that opened on December 18, 2015 - was $17.6 million in the fourth quarter of 2015.

Depreciation and amortization expense was $248.7 million in the fourth quarter of 2015, compared to $255.5 million in the fourth quarter of 2014. 

Interest expense, net of amounts capitalized, was $66.2 million for the fourth quarter of 2015, compared to $66.7 million in the prior-year quarter. Capitalized interest was $10.7 million during the fourth quarter of 2015, compared to $3.1 million during the fourth quarter of 2014.  Our weighted average borrowing cost in the fourth quarter of 2015 was approximately 3.2%.

Corporate expense was $48.9 million in the fourth quarter of 2015, compared to $36.2 million in the fourth quarter of 2014.

Other expense was $1.0 million in the fourth quarter of 2015, compared to other income of $4.3 million in the fourth quarter of 2014.

The company's effective income tax rate for the fourth quarter of 2015 was 9.8% compared to 9.4% in the prior-year quarter. The tax rate is primarily driven by a provision for the earnings from Marina Bay Sands at the 17% Singapore income tax rate.

The net income attributable to noncontrolling interests during the fourth quarter of 2015 of $109.2 million was principally related to Sands China Ltd. 

Balance Sheet Items

Unrestricted cash balances as of December 31, 2015 were $2.18 billion.

As of December 31, 2015, total debt outstanding, including the current portion, was $9.47 billion.

Capital Expenditures

Capital expenditures during the fourth quarter totaled $415.7 million, including construction, development and maintenance activities of $354.3 million in Macao, $33.1 million at Marina Bay Sands, $23.6 million in Las Vegas, and $4.7 million at Sands Bethlehem.

Conference Call Information

The company will host a conference call to discuss the company's results on Wednesday, January 27, 2016 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.

Forward-Looking Statements

This press release contains forward-looking statements that are 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, general economic conditions, competition, new development, construction and ventures, substantial leverage and debt service, government regulation, tax law changes, legalization of gaming, interest rates, future terrorist acts, influenza, insurance, gaming promoters, risks relating to our gaming licenses, certificate and subconcession, infrastructure in Macao, our ability to meet certain development deadlines, our subsidiaries' ability to make distribution payments to us, 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.

Note 1

Adjusted net income excludes pre-opening expense, development expense, gain or loss on disposal of assets and loss on modification or early retirement of debt.

About Las Vegas Sands

Las Vegas Sands (NYSE: LVS) is the world's leading developer and operator of Integrated Resorts. Our collection of Integrated Resorts in Asia and the United States feature state-of-the-art convention and exhibition facilities, premium accommodations, world-class gaming and entertainment, destination retail and dining including celebrity chef restaurants, and many other amenities.

Our properties include the five-diamond Venetian and Palazzo resorts and Sands Expo Center in Las Vegas, Sands Bethlehem in Eastern Pennsylvania, and the iconic Marina Bay Sands in Singapore.  Through majority ownership in Sands China Ltd. (HK: 1928), LVS owns a portfolio of properties on the Cotai Strip in Macao, including The Venetian Macao, The Plaza and Four Seasons Hotel Macao and Sands Cotai Central, as well as the Sands Macao on the Macao Peninsula.

LVS is dedicated to being a good corporate citizen, anchored by the core tenets of delivering a great working environment for nearly 50,000 employees worldwide, driving impact through our Sands Cares corporate citizenship program and leading innovation with the company's award-winning Sands ECO360° global sustainability program.  To learn more, please visit www.sands.com.     

Contacts:

Las Vegas Sands Corp. Fourth Quarter 2015 Results Non-GAAP Reconciliations

Within the company's fourth quarter 2015 press release, the company makes reference to certain non-GAAP financial measures including "adjusted net income," "hold-normalized adjusted net income," "adjusted earnings per diluted share," "hold-normalized adjusted earnings per diluted share," "adjusted property EBITDA," and "hold-normalized adjusted property EBITDA."  Whenever such information is presented, the company has complied with the provisions of the rules under Regulation G and Item 2.02 of Form 8-K.  The specific reasons why the company's management believes that the presentation of each of these non-GAAP financial measures provides useful information to investors regarding Las Vegas Sands Corp.'s financial condition, results of operations and cash flows has been provided in the Form 8-K filed in connection with this press release.

Adjusted property EBITDA consists of operating income (loss) before depreciation and amortization, amortization of leasehold interests in land, gain or loss on disposal of assets, pre-opening expense, development expense, royalty fees, stock-based compensation and corporate expense.  Reconciliations of GAAP operating income (loss) and GAAP net income attributable to Las Vegas Sands Corp. to adjusted property EBITDA and hold-normalized adjusted property EBITDA are included in the financial schedules accompanying this release.

 

 

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SOURCE Las Vegas Sands Corp.