e8vk
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
PURSUANT TO SECTION 13 OR 15(D) OF THE
SECURITIES EXCHANGE ACT OF 1934
Date of Report (date of earliest event reported): November 10, 2008
LAS VEGAS SANDS CORP.
(Exact name of registrant as specified in its charter)
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NEVADA
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001-32373
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27-0099920 |
(State or other jurisdiction
of incorporation)
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(Commission File Number)
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(IRS Employer
Identification No.) |
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3355 LAS VEGAS BOULEVARD SOUTH |
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LAS VEGAS, NEVADA
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89109 |
(Address of principal executive offices)
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(Zip Code) |
Registrants telephone number, including area code: (702) 414-1000
NOT APPLICABLE
(Former name or former address, if changed since last report)
Check the appropriate box if the Form 8-K filing is intended to simultaneously satisfy the
filing obligation of the registrant under any of the following provisions (See General Instruction
A.2. below):
o Written Communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
o Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
o Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
o Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
Forward-Looking Statements
This report contains forward-looking statements that are 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 its
management, are intended to identify forward-looking statements. Although we believe that these
forward-looking statements are reasonable, we cannot assure you that any forward-looking statements
will prove to be correct. These forward looking statements involve known and unknown risks,
uncertainties and other factors, 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:
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our substantial leverage, debt service and debt covenant compliance (including sensitivity
to fluctuations in interest rates and other capital markets trends); |
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our ability to continue as a going concern;
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recent development in the financial markets and our ability to obtain sufficient funding
for our current and future developments, including our Cotai Strip developments; |
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general economic and business conditions which may impact levels of disposable income,
consumer spending, the pricing of hotel rooms and retail and mall
sales; |
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the impact of the delays and suspensions of certain of our development projects; |
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the uncertainty of tourist behavior related to spending and vacationing at casino-resorts
in Las Vegas, Macao and Singapore; |
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potential visa restrictions limiting the number of visits and the length of stay for
visitors from mainland China to our Macao properties; |
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our dependence upon properties in Las Vegas and Macao for all of our cash flow; |
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our relationship with GGP or any successor owner of The Shoppes at
The Palazzo and The Grand Canal Shoppes, and the ability of GGP to
perform under the Phase II Mall purchase and sale agreement, as
amended;
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new developments, construction and ventures, including our Cotai Strip developments, Marina
Bay Sands, Sands Bethlehem and the St. Regis Residences; |
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the passage of new legislation and receipt of governmental approvals for our proposed
developments in Macao, Singapore and other jurisdictions where we are planning to operate; |
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our insurance coverage, including the risk that we have not obtained sufficient coverage
against acts of terrorism or will only be able to obtain additional coverage at significantly
increased rates; |
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disruptions or reductions in travel due to conflicts in Iraq and any future terrorist
incidents; |
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outbreaks of infectious diseases, such as severe acute respiratory syndrome or avian flu,
in our market areas; |
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government regulation of the casino industry, including gaming license regulation, the
legalization of gaming in certain domestic jurisdictions, including Native American
reservations, and regulation of gaming on the Internet; |
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increased competition and additional construction in Las Vegas, including recent and
upcoming increases in hotel rooms, meeting and convention space and retail space; |
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fluctuations in the demand for all-suites rooms, occupancy rates and average daily room
rates in Las Vegas; |
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the popularity of Las Vegas and Macao as convention and trade show destinations; |
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new taxes or changes to existing tax rates; |
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our ability to meet certain development deadlines in Macao and Singapore; |
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our ability to maintain our gaming subconcession in Macao; |
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the completion of infrastructure projects in Macao and Singapore; |
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increased competition and other planned construction projects in Macao and Singapore; and |
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the outcome of any ongoing and future litigation. |
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.
Item 2.02 Results of Operations and Financial Condition.
The following information is being furnished under Item 2.02 Results of Operations and
Financial Condition.
On November 10, 2008, Las Vegas Sands Corp. (the Company) issued a press release announcing
its results of operations for the third quarter ended September 30, 2008. The press release is
attached as Exhibit 99.1 to this report and is incorporated by reference into this item.
Within the Companys third quarter 2008 press release, the Company makes reference to certain
non-GAAP financial measures including adjusted net income, adjusted earnings per diluted share,
adjusted EBITDA and adjusted property EBITDAR, which have directly comparable GAAP financial
measures. The Company believes that these measures represent important internal measures of
performance. Accordingly, where these non-GAAP measures are provided, it is done so that investors
have the same financial data that management uses in evaluating performance with the belief that it
will assist the investment community in properly assessing the underlying performance of the
Company on a year-over-year and a quarter sequential basis. 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, in addition to the reasons described above, why the
Companys management believes that the presentation of the non-GAAP financial measures provides
useful information to investors regarding the Companys financial condition, results of operations
and cash flows are as follows:
Adjusted net income and adjusted earnings 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 gaming companies, as
these non-GAAP measures are considered by many as an alternative measure on which to base
expectations for future results. These measures also form the basis of certain internal management
performance expectations. Accordingly, these measures are presented so that investors have the
same financial data that management uses in evaluating performance with the belief that it will
assist the investment community in properly assessing the underlying performance of the Company on
a year-over-year and a quarter sequential basis.
Adjusted property EBITDAR and adjusted EBITDA are supplemental non-GAAP financial measures
used by management, as well as industry analysts, to evaluate
operations
(segments) and operating performance. In particular, management utilizes adjusted property EBITDAR
to compare the operating profitability of its casinos with those of its competitors, as well as for
determining certain incentive compensation. In arriving at adjusted property EBITDAR, rental
expense for the HVAC plant in Las Vegas and amortization of the leasehold interest in land is added
to adjusted EBITDA because the Company believes this provides a better comparison of the Companys
operating profitability to that of its competitors. The Company is also presenting adjusted
property EBITDAR because it is used by some investors as a way to measure a companys ability to
incur and service debt, make capital expenditures and meet working capital requirements. Gaming
companies have historically reported EBITDAR as a supplemental performance measure to GAAP
financial measures. In order to view the operations of their casinos on a more stand-alone basis,
gaming companies, including Las Vegas Sands Corp., have historically excluded certain expenses that
do not relate to the management of specific casino properties, such as pre-opening expense,
development expense, and corporate expense, from their EBITDAR calculations. When evaluating
adjusted property EBITDAR, investors should consider, among other factors, (1) increasing or
decreasing trends in adjusted property EBITDAR and (2) how adjusted property EBITDAR compares to
levels of debt and interest expense. However, adjusted property EBITDAR 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
generally accepted accounting principles. The Company has significant uses of cash flow, including
capital expenditures, interest payments and debt principal repayments, which are not reflected in
adjusted property EBITDAR. Not all companies calculate EBITDAR in the same manner. As a result,
adjusted property EBITDAR as presented by Las Vegas Sands Corp. may not be directly comparable to
similarly titled measures presented by other companies. Adjusted property EBITDAR consists of
adjusted EBITDAR for a particular property, such as The Venetian and The Palazzo in Las Vegas and
The Venetian Macao and the Sands Macao in Macao. Accordingly, the measures are presented so that
investors have the same financial data that management uses in evaluating performance with the
belief that it will assist the investment community in properly assessing the underlying
performance of the Company on a year-over-year and a quarter sequential basis.
Item 7.01 Regulation FD Disclosure.
The
disclosure in this Item 7.01 is being filed for purposes of the Exchange Act.
The
Company is filing hereby the following projections which were previously
confidentially furnished to potential investors.
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Estimated |
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2012 Adjusted |
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Property |
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Estimated 2012 |
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Property |
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Quarter Open |
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EBITDAR |
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Operating Income |
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(in millions) |
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U.S. |
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Venetian Las Vegas |
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2Q 1999 |
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$ |
289.0 |
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$ |
187.0 |
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Palazzo Las Vegas |
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4Q 2007 |
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258.0 |
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93.0 |
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Sands Bethlehem (PA)(1) |
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2Q 2009 (est) |
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154.0 |
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125.0 |
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Sands Expo Center |
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4Q 1991 |
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20.0 |
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16.0 |
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Macao |
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Venetian Macao |
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3Q 2007 |
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625.0 |
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414.0 |
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Sands Macao |
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2Q 2004 |
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239.0 |
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183.0 |
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Four Seasons Macao |
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3Q 2008 |
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140.0 |
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96.0 |
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Singapore |
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Marina Bay Sands |
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1Q 2010 (est) |
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1,259.0 |
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1,091.0 |
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Corporate and Other Asia(2) |
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N/A |
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(127.0 |
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(137.0 |
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Total |
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$ |
2,857.0 |
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$ |
2,068.0 |
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Phase I Macau Sites 5 and 6 |
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TBD |
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533.0 |
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$ |
464.0 |
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Adjusted Total |
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$ |
3,390.0 |
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$ |
2,532.0 |
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(1) |
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Represents our share of the Sands Bethlehem EBITDAR and operating income.
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(2) |
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Includes operations of CotaiJet and excludes stock based compensation. |
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The Marina Bay Sands
Profitability Illustration
(US$ in millions)
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Venetian |
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Marina Bay |
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Macao |
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Sands |
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Difference |
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Gaming Win(1) |
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$ |
2,010 |
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$ |
2,010 |
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Effective Gaming and GST Tax Rate |
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39.0 |
% |
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17.3 |
% |
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Gaming and GST Taxes(2) |
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$ |
784 |
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$ |
347 |
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$ |
436 |
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Venetian Macao LTM EBITDAR at 9/30/08 |
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$ |
504 |
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Difference in Gaming and GST Taxes from Above |
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$ |
436 |
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Implied Marina Bay Sands EBITDAR Assuming
Comparable Gaming Win |
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$ |
940 |
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(1) |
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Twelve months ended September 30, 2008 for Venetian Macao |
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Gaming tax in Macao is 39%. Projected blended effective GST and gaming tax in Singapore is
17.3%. |
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The Marina Bay Sands
Gaming Comparison
(US$)
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Venetian Macao |
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Marina Bay Sands |
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YTD 9/30/08 |
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Target 2012E |
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Rolling Table WPUD |
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$ |
23,515 |
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$ |
22,411 |
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Non-Rolling Table WPUD |
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3,088 |
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3,922 |
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Total Table WPUD |
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6,669 |
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7,886 |
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Slot WPUD |
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170 |
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308 |
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The Marina Bay Sands
WPUD Sensitivity
(US$ in millions, except WPUD
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Implied Marina Bay Sands EBITDAR(1) |
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Number of Tables |
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800 |
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900 |
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1,000 |
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Total |
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$ |
8,866 |
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1,262 |
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1,476 |
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1,690 |
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Table |
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$ |
7,866 |
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1,069 |
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1,259 |
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1,449 |
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WPUD |
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$ |
6,866 |
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876 |
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1,041 |
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1,207 |
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(1) |
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Assumes rolling WPUD is fixed at $22,411 for an estimated 192 rolling tables in each case. |
The estimates provided above are projections and have been prepared by management. These
projections are based upon a number of assumptions made by management, including:
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The scheduled completion and opening of the Marina Bay Sands project in Singapore no
later than the first quarter of 2010 within its current estimated cost budget (although
the Company currently anticipates completion and opening of the Marina Bay Sands in the
fourth quarter of 2009). Completion of the Marina Bay Sands project will require the
Company to contribute an additional approximately $427.0 million in equity to the project
under the terms of the loan funding a significant portion of construction costs. |
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The receipt of final approval of the Companys final casino floor plan from the Casino
Regulatory Authority of Singapore with such floor plan permitting up to 1,000 gaming
tables and 1,400 slot machines in the Marina Bay Sands. |
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The scheduled completion of the casino portion of the Companys Sands Bethlehem project
in the second quarter of 2009 within its current estimated cost budget of approximately
$743.0 million. |
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Growth in demand for gaming, hotel rooms and related amenities at the Companys U.S.,
Singapore and Macao operations in line with historical growth rates observed by its
management. |
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With regard to Phase I Macao Sites 5 and 6, obtaining project financing that is
currently targeted to be obtained within the next three to six months in an amount
sufficient to resume and complete construction. |
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Achieving assumed occupancy and projected room rates at the Companys hotel properties. |
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The completion of one or more financing transactions in sufficient amounts. |
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Assumptions as to the factors noted in the Forward-Looking Statements disclosure at
the beginning of this Current Report on Form 8-K above. |
Any differences among these assumptions and the Companys actual experiences may result in
actual results in future periods significantly differing from managements
current estimates. The estimates set forth above are
management estimates and are not guarantees of future performance. Factors outside of the Companys
control may cause actual results to be materially lower than these projections. There can be no
assurance that any of the Companys assumptions will reflect actual performance. The continuation
or further deterioration of current market conditions may result in changes to the above
assumptions or may result in unforeseeable effects on the Companys business that could cause
actual results to differ. In addition, these projections are forward-looking statements and are
subject to those risks, uncertainties and other factors listed under Forward-Looking Statements
above. In managements view, such information was prepared on a reasonable basis,
reflects the best currently available estimates and judgments and, to managements knowledge and
belief, presents the assumptions and considerations on which the Company bases its belief that it
can generate such results. The Company does
not intend to update the projections on a quarterly basis or
otherwise.
See the disclosure in Item 2.02Results of Operations and Financial Condition above for a
discussion of why the Company presents adjusted property EBITDAR.
The following are reconciliations of the Companys projected operating income (loss) to its
projected adjusted property EBITDAR presented above ($ in millions):
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(Gain) |
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Operating |
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Depreciation |
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Loss on |
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Pre- |
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Adjusted |
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Income/ |
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and |
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Disposal |
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Opening |
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Development |
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Stock-Based |
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Corporate |
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Rental |
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Property |
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(loss) |
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Amortization |
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of Assets |
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Expense |
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Expense |
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Compensation |
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Expense |
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Expense |
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EBITDAR(1) |
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Sands Macao |
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$ |
183 |
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$ |
51 |
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$ |
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$ |
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$ |
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$ |
3 |
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$ |
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$ |
1 |
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$ |
239 |
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The Venetian Macao |
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414 |
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196 |
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8 |
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8 |
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625 |
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Four Seasons Macao |
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96 |
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42 |
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2 |
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1 |
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140 |
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Phase I
Macao Sites
5 and 6 |
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464 |
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61 |
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5 |
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4 |
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533 |
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Marina Bay Sands |
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1,091 |
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153 |
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14 |
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1,259 |
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Sands Bethlehem(2) |
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125 |
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26 |
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3 |
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154 |
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Venetian Las Vegas |
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187 |
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85 |
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14 |
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4 |
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289 |
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Palazzo Las Vegas |
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93 |
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152 |
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10 |
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3 |
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258 |
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Sands Expo Center |
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16 |
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3 |
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1 |
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20 |
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Corporate/Other Asia(3) |
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(137 |
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10 |
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(127 |
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(1) |
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Certain figures do not total due to rounding. |
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(2) |
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Represents our share of Sands Bethlehem |
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(3) |
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Includes operations of CotaiJet |
Item 9.01 Financial Statements and Exhibits.
(d) Exhibits.
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99.1
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Press Release, dated November 10, 2008. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly
caused this report on Form 8-K to be signed on its behalf by the undersigned, thereunto duly
authorized.
Dated: November 10, 2008
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LAS VEGAS SANDS CORP.
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By: |
/s/ Scott D. Henry
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Name: |
Scott D. Henry |
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Title: |
Senior Vice President--Finance |
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INDEX TO EXHIBITS
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99.1
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|
Press Release, dated November 10, 2008. |