Las Vegas Sands Reports Second Quarter 2019 Results

LAS VEGAS, July 24, 2019 /PRNewswire/ --

For the quarter ended June 30, 2019
(Compared to the quarter ended June 30, 2018)

- Consolidated Net Revenue of $3.33 Billion

- Net Income of $1.11 Billion; GAAP Earnings per Diluted Share of $1.24; Adjusted Earnings per Diluted Share of $0.72

- Consolidated Adjusted Property EBITDA of $1.27 Billion

- In Macao, Adjusted Property EBITDA Increased 2.0% to $765 Million, While Hold-Normalized Adjusted Property EBITDA Increased 1.9% to $744 Million

- At Marina Bay Sands in Singapore, Adjusted Property EBITDA was $346 Million, While Hold-Normalized Adjusted Property EBITDA was $384 Million

- Our Las Vegas Operating Properties Adjusted Property EBITDA was $136 Million

- The Company Paid Quarterly Dividends of $0.77 per Share

- The Company Repurchased $180 Million of Common Stock During the 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 June 30, 2019.

Net revenue was $3.33 billion, an increase of 0.9% from the prior year quarter. Operating income increased 12.2% to $894 million. Net income increased 63.9% to $1.11 billion and included a gain of $556 million related to the sale of Sands Bethlehem. Consolidated adjusted property EBITDA (a non-GAAP measure) was $1.27 billion, an increase of 3.3% compared to the prior year quarter. On a hold-normalized basis, consolidated adjusted property EBITDA increased 3.6% to $1.29 billion.

"We delivered solid financial results in the quarter, with hold-normalized Adjusted Property EBITDA reaching nearly $1.3 billion," said Sheldon G. Adelson, chairman and chief executive officer. "We remain enthusiastic about our future growth opportunities in Asia, which will be enhanced through the introduction of our Four Seasons Tower Suites Macao later this year, the Londoner Macao throughout 2020 and 2021 and the expansion of Marina Bay Sands in Singapore thereafter. We are also aggressively pursuing additional development opportunities in new markets, including in Osaka, Japan. Finally, we remain deeply committed to maintaining our industry-leading financial strength while continuing to return capital to shareholders."

The company paid a recurring quarterly dividend of $0.77 per common share and increased its return of capital through share repurchases of $180 million during the quarter. The company announced its next quarterly dividend of $0.77 per common share will be paid on September 26, 2019, to Las Vegas Sands shareholders of record on September 18, 2019.

Net income attributable to Las Vegas Sands in the second quarter of 2019 increased to $954 million, compared to $556 million in the second quarter of 2018, while diluted earnings per share increased 77.1% to reach $1.24.

Adjusted net income attributable to Las Vegas Sands (a non-GAAP measure) was $555 million, or $0.72 per diluted share, compared to $588 million, or $0.74 per diluted share, in the second quarter of 2018. Hold-normalized adjusted earnings per diluted share was $0.75.

Sands China Ltd. Consolidated Financial Results
On a GAAP basis, total net revenues for SCL increased 1.4%, compared to the second quarter of 2018, to $2.14 billion. Net income for SCL increased 19.7% to $511 million.

Other Factors Affecting Earnings
On May 31, 2019, we closed the sale of Sands Bethlehem and received $1.16 billion in net cash proceeds, before transaction costs and state income taxes. We realized a gain on the sale of $556 million.

Depreciation and amortization expense was $289 million in the second quarter of 2019, compared to $274 million in the second quarter of 2018. The increase relates to the acceleration of depreciation expense for certain Sands Cotai Central assets as it is converted into The Londoner Macao.

Interest expense, net of amounts capitalized, was $143 million for the second quarter of 2019, compared to $93 million in the prior-year quarter. The increase resulted from increased level of borrowings from the SCL Notes issued in August 2018 and from the U.S. credit facility in June 2018 and our weighted average borrowing cost in the second quarter of 2019 increasing to 4.7%, compared to 3.5% during the second quarter of 2018.

Our effective income tax rate for the second quarter of 2019 was 17.6% compared to 10.7% in the prior-year quarter. The tax rate for the second quarter of 2019 is primarily driven by a provision for the earnings from Marina Bay Sands at the 17% Singapore income tax rate and the income tax impact of the sale of Sands Bethlehem. Without the sale of Sands Bethlehem, the rate for Q2 2019 would have been 9.6%.

Balance Sheet Items
Unrestricted cash balances as of June 30, 2019 were $4.02 billion.
As of June 30, 2019, total debt outstanding, excluding finance leases, was $12.0 billion.

Capital Expenditures
Capital expenditures during the second quarter totaled $213 million, including construction, development and maintenance activities of $99 million in Macao, $65 million in Las Vegas and $49 million at Marina Bay Sands.

Conference Call Information
The company will host a conference call to discuss the company's results on Wednesday, July 24, 2019 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 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, fluctuations in currency exchange rates and interest rates, government regulation, tax law changes and the impact of U.S. tax reform, legalization of gaming, natural or man-made disasters, terrorist acts or war, outbreaks of infectious diseases, insurance, gaming promoters, risks relating to our gaming licenses and subconcession, infrastructure in Macao, 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.

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 50,000 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.

Contacts:

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

Within the company's second quarter 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 an adjustment for a nonrecurring non-cash benefit 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 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 are 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 to third parties on the incremental win, 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.