Las Vegas Sands Reports Fourth Quarter 2019 Results

LAS VEGAS, Jan. 29, 2020 /PRNewswire/ --

For the Quarter Ended December 31, 2019
(Compared to the Quarter Ended December 31, 2018)

• Consolidated Net Revenue of $3.51 Billion
• Net Income of $783 Million; GAAP Earnings per Diluted Share of $0.82; Adjusted Earnings per Diluted Share of $0.88
• Consolidated Adjusted Property EBITDA was $1.39 Billion; Hold-Normalized Adjusted Property EBITDA was $1.31 Billion
• In Macao, Adjusted Property EBITDA was $811 Million
• At Marina Bay Sands in Singapore, Adjusted Property EBITDA was $457 Million
• At Our Las Vegas Operating Properties, Adjusted Property EBITDA was $120 Million
• The Company Paid Quarterly Dividends of $0.77 per Share
• The Company Repurchased $300 Million of Common Stock During the Quarter

For the Year Ended December 31, 2019
(Compared to the Year Ended December 31, 2018)

• Consolidated Net Revenue of $13.74 Billion;
• Net Income of $3.30 Billion; GAAP Earnings Per Diluted Share of $3.50; Adjusted Earnings per Diluted Share of $3.26
• Consolidated Adjusted Property EBITDA was $5.39 Billion
• The Company Paid Dividends of $3.08 per Share
• The Company Repurchased $754 million of Common Stock
• The Company's Board of Directors Announced an Increase in the Company's Recurring Common Stock Dividend for 2020 to $3.16 per Share ($0.79 per Share per Quarter)

Las Vegas Sands Corp. (NYSE: LVS), the world's leading developer and operator of convention-based Integrated Resorts, today reported financial results for the quarter ended December 31, 2019.

Net revenue was $3.51 billion, an increase of 1.0% from the prior year quarter. Operating income increased 6.9% to $934 million. Net income increased to $783 million compared to a net loss of $40 million in the year ago quarter, which was due to improved operating results and nonrecurring non-cash income tax expense of $727 million for U.S. tax reform in 2018, as further discussed below. Consolidated adjusted property EBITDA was $1.39 billion, an increase of 9.1% from the prior year quarter due to increases in each of our jurisdictions, led by Singapore increasing $95 million.

"We delivered solid financial results in the quarter, with Adjusted Property EBITDA reaching $1.39 billion," said Sheldon G. Adelson, chairman and chief executive officer. "We remain enthusiastic about our future growth opportunities in Asia. This year, we will introduce approximately two million square feet of luxurious suite accommodations on the Cotai Strip with the opening of the Grand Suites at Four Seasons Macao and The Londoner Tower Suites. Additional tourism and entertainment amenities of The Londoner Macao will debut throughout 2020 and 2021. Looking further ahead, the expansion of Marina Bay Sands in Singapore will meaningfully increase our suite capacity and introduce a state-of-the-art entertainment arena, both of which should contribute to future growth. We are also aggressively pursuing additional development opportunities in new markets, including in Japan.

"Finally, we remain deeply committed to maintaining our industry-leading financial strength while continuing to increase the return of capital to shareholders. As previously announced, our annual dividend for the 2020 calendar year will increase to $3.16 per share, or $0.79 per share per quarter."

The company paid a recurring quarterly dividend of $0.77 per common share and continued its return of capital through share repurchases of $300 million during the quarter. The company announced its next quarterly dividend of $0.79 per common share will be paid on March 26, 2020, to Las Vegas Sands shareholders of record on March 18, 2020.

Net income attributable to Las Vegas Sands in the fourth quarter of 2019 was $629 million, compared to net loss attributable to Las Vegas Sands of $170 million in the fourth quarter of 2018, while diluted earnings per share in the fourth quarter of 2019 was $0.82, compared to diluted loss per share of $0.22 in the prior-year quarter. The increase was primarily a result of nonrecurring non-cash income tax items due to the implementation of U.S. tax reform in 2018.

Adjusted net income attributable to Las Vegas Sands was $678 million, or $0.88 per diluted share, compared to $598 million, or $0.77 per diluted share, in the fourth quarter of 2018. Hold-normalized adjusted earnings per diluted share was $0.80.

Full year 2019 operating income decreased 1.4% to $3.70 billion, compared to $3.75 billion in 2018, due to increased corporate expense. Net income attributable to Las Vegas Sands increased 11.8% to $2.70 billion, or $3.50 per diluted share, in 2019, compared to $2.41 billion, or $3.07 per diluted share, in 2018. The increase in net income attributable to Las Vegas Sands reflected the gain on the sale of Sands Bethlehem, partially offset by the decrease in operating income and increases in income tax and interest expense.

Sands China Ltd. Consolidated Financial Results
On a GAAP basis, total net revenues for SCL decreased to $2.24 billion in the fourth quarter of 2019, compared to $2.25 billion in the fourth quarter of 2018. Net income for SCL increased to $513 million in the fourth quarter of 2019, compared to $465 million in the fourth quarter of 2018.

On a GAAP basis, full year 2019 total net revenues for SCL increased to $8.81 billion, compared to $8.67 billion in 2018. Net income for SCL increased to $2.04 billion in 2019, compared to $1.90 billion in 2018.

Other Factors Affecting Earnings
Interest expense, net of amounts capitalized, was $134 million for the fourth quarter of 2019, compared to $138 million in the prior-year quarter. The decrease resulted from our weighted average borrowing cost in the fourth quarter of 2019 decreasing to 4.3%, compared to 4.5% during the fourth quarter of 2018.

Our income tax expense for the fourth quarter of 2019 was $65 million (an effective income tax rate of 7.7%), compared to $782 million in the prior year quarter. The tax rate for the fourth quarter of 2019 is primarily driven by a 17% statutory tax rate on our Singapore operations. The tax expense for the fourth quarter of 2018 is primarily due to nonrecurring non-cash expense of $727 million resulting from guidance issued by the Internal Revenue Service related to the international provision of the Tax Cuts and Jobs Act (the "Act"). This guidance clarified the implementation of the Global Intangible Low-Taxed Income ("GILTI") and other provisions which impact the foreign tax credit utilization and required an increase of a valuation allowance related to our historical foreign tax credits. Our effective income tax rate for the fourth quarter of 2018 would have been 7.4% without the discrete expense associated with the Act.

Balance Sheet Items
Unrestricted cash balances as of December 31, 2019 were $4.23 billion.

As of December 31, 2019, total debt outstanding, excluding finance leases, was $12.48 billion.

Capital Expenditures
Capital expenditures during the fourth quarter totaled $460 million, including construction, development and maintenance activities of $352 million in Macao, $61 million at Marina Bay Sands and $47 million in Las Vegas.

Conference Call Information
The company will host a conference call to discuss the company's results on Wednesday, January 29, 2020 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 pre-eminent 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, Sands Cotai Central 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 charitable giving and community engagement 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, general economic conditions, disruptions or reductions in travel, as well as in our operations, due to natural or man-made disasters, pandemics, epidemics, or outbreaks of infectious or contagious diseases such as the coronavirus originating in Wuhan, China, new development, construction and ventures, government regulation, risks relating to our gaming licenses and subconcession, fluctuations in currency exchange rates and interest rates, substantial leverage and debt service, gaming promoters, competition, tax law changes, infrastructure in Macao, political instability, civil unrest, terrorist acts or war, legalization of gaming, insurance, 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.

Contacts:

Investment Community:
Daniel Briggs
Daniel.Briggs@sands.com
(702) 414-1221

Media:
Ron Reese
Ron.Reese@sands.com
(702) 414-3607

Las Vegas Sands Corp.
Fourth Quarter 2019 Results
Non-GAAP Measures

Within the company's fourth quarter and full year 2019 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," "adjusted earnings 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," and "hold-normalized adjusted earnings 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, 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 and a nonrecurring non-cash adjustment due to U.S. tax reform enacted in 2017. 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 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 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 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 3.15% to the Rolling Chip volume for the quarter if the actual win percentage is outside the expected range of 3.0% to 3.3% 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. No hold adjustments were made for Sands Bethlehem. 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 and hold-normalized adjusted earnings per diluted share are additional supplemental non-GAAP financial measures that, in addition to the aforementioned reasons for the presentation of adjusted net income and adjusted earnings 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.