UNITED STATES
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): August 20, 2015
LAS VEGAS SANDS CORP.
(Exact name of registrant as specified in its charter)
|
|
|
|
|
| NEVADA |
|
001-32373 |
|
27-0099920 |
| (State or other jurisdiction of incorporation) |
|
(Commission File Number) |
|
(IRS Employer Identification No.) |
|
|
| 3355 LAS VEGAS BOULEVARD SOUTH
LAS VEGAS, NEVADA |
|
89109 |
| (Address of principal executive offices) |
|
(Zip Code) |
Registrant’s 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):
| ¨ |
Written Communication pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
| ¨ |
Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
| ¨ |
Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
| ¨ |
Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
| Item 7.01 |
Regulation FD Disclosure. |
On August 20, 2015, Sands China Ltd. (“SCL”), a subsidiary of Las Vegas Sands Corp. with ordinary shares listed on The
Stock Exchange of Hong Kong Limited (the “SEHK”), filed its interim report in respect of the six month period ended June 30, 2015 (the “2015 Interim Report”) with the SEHK. The 2015 Interim Report is furnished as Exhibit
99.1 to this Form 8-K.
The information in this Form 8-K and Exhibit 99.1 attached hereto shall not be deemed
“filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended, nor shall it be deemed incorporated by reference in any filing under the Securities Act of 1933, as amended, except as shall be expressly set forth
by specific reference in any such filing.
| Item 9.01 |
Financial Statements and Exhibits. |
|
|
|
| 99.1 |
|
2015 Interim Report of Sands China Ltd. |
2
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: August 20, 2015
|
|
|
| LAS VEGAS SANDS CORP. |
|
|
| By: |
|
/s/ Ira H. Raphaelson |
| Name: |
|
Ira H. Raphaelson |
| Title: |
|
Executive Vice President and Global General Counsel |
3
INDEX TO EXHIBITS
| 99.1 2015 Interim Report of Sands China Ltd. |
|
4
Exhibit 99.1
Exhibit
99.1
INTERIM REPORT
2015
FROM
LUXURY DUTY FREE SHOPPING, EXCITING ENTERTAINMENT AND FABULOUS DINING TO WORLD-CLASS HOTEL SUITES AND MICE, COME AND DISCOVER EVERYTHING AT SANDS CHINA.
CONTENTS
| 1.1 |
|
Financial Highlights 3 |
and Analysis 5
| 2.1 |
|
Results of Operations 5 |
| 2.2 |
|
Liquidity and Capital Resources 11 |
| 2.3 |
|
Capital Expenditures 12 |
| 2.4 |
|
Capital Commitments 13 |
| 2.6 |
|
Pledge of Fixed Assets 13 |
| 2.7 |
|
Contingent Liabilities and Risk Factors 14 |
| 2.8 |
|
Capital Risk Management 14 |
| 2.9 |
|
Foreign Exchange Risk 15 |
| 2.10 |
|
Business Review and Prospects 15 |
| 3. |
|
Corporate Governance 17 |
| 3.3 |
|
Corporate Governance Practices 19 |
| 3.4 |
|
Model Code for Securities Transactions 19 |
| 3.5 |
|
Board and Board Committees Composition 19 |
| 3.6 |
|
Disclosure of Directors’ Information pursuant to 21 |
Rule 13.51B(1) of the Listing Rules
| 3.7 |
|
Audit Committee Review 21 |
| 3.8 |
|
Interests of Directors and Chief Executives 21 |
| 3.9 |
|
Interests of Substantial Shareholders 23 |
| 3.10 |
|
Interests of Any Other Persons 23 |
| 3.11 |
|
Equity Award Plan 23 |
| 3.12 |
|
Purchase, Sale or Redemption of 26 |
the Company’s Listed Shares
| 4. |
|
Condensed Consolidated |
Financial Statements 27
| 4.1 |
|
Report on Review of Condensed Consolidated 27 |
Financial Statements
| 4.2 |
|
Condensed Consolidated Financial Statements 28 |
| 4.3 |
|
Notes to the Condensed Consolidated 34 |
Financial Statements
| 5. |
|
Corporate Information 57 |
In case of any inconsistency between the English version
and the Chinese version of this interim report, the English
version shall prevail.
OUR
LUXURIOUS HOTEL ROOMS AND SUITES AWAIT YOU.
SANDS
CHINA LTD. Interim Report 2015
1. OVERVIEW
1.1 FINANCIAL HIGHLIGHTS
Adjusted EBITDA for the Group was US$1,096.2 million (HK$8,498.1 million) in the first half of 2015, a decrease of 36.9% compared to US$1,737.4 million (HK$13,467.1 million) in the first
half of 2014.
Total net revenues for the Group were US$3,516.6 million (HK$27,261.7 million) in the first half
of 2015, a decrease of 30.7% compared to US$5,075.3 million (HK$39,340.2 million) in the first half of 2014.
Profit for the Group was US$734.5 million (HK$5,694.1 million) in the first half of 2015, a decrease of 46.4% compared to
US$1,370.4 million (HK$10,622.4 million) in the first half of 2014.
Capitalized terms used but not defined
herein shall have the meanings ascribed to them in our 2014 Annual Report.
Note: The translation of US$
amounts into HK$ amounts has been made at the rate of US$1.00 to HK$7.7523 (six months ended June 30, 2014: US$1.00 to HK$7.7513) for the purposes of illustration only.
SOMETHING
SUMPTUOUS
TO SUIT EVERY TASTE.
SANDS
CHINA LTD. Interim Report 2015
2. MANAGEMENT
DISCUSSION
AND ANALYSIS
2.1 RESULTS OF OPERATIONS
The Board of Directors (the “Board”) of Sands China Ltd. (“we” or our “Company”)
is pleased to present the unaudited consolidated results of the Company and its subsidiaries (collectively the “Group”) for the six months ended June 30, 2015 compared to the six months ended June 30, 2014.
Net Revenues
Our net revenues consisted of the following:
Six
months ended June 30,
2015 2014 Percent change
(US$ in millions, except percentages)
Casino 2,998.7 4,571.5(34.4)%
Mall 181.3 147.9
22.6%
Rooms 154.0 164.9(6.6)%
Food and beverage 74.3 84.1(11.7)%
Convention,
ferry, retail and other 108.3 106.9 1.3%
Total net revenues 3,516.6 5,075.3(30.7)%
Net revenues were US$3,516.6 million for the six months ended June 30, 2015, a decrease of US$1,558.7 million, or
30.7%, compared to US$5,075.3 million for the six months ended June 30, 2014. Net revenues decreased in our casino, rooms, and food and beverage segments, mainly driven by the overall market slowdown in the Macao gaming industry. Despite the
softer gaming market in Macao, we continued to enjoy Macao market-leading visitation and focused on driving the high-margin mass market gaming segment, while providing luxury amenities and high service levels to our VIP and premium players.
Our net casino revenues for the six months ended June 30, 2015 were US$2,998.7 million, a decrease of
US$1,572.8 million, or 34.4%, compared to US$4,571.5 million for the six months ended June 30, 2014. The reduction was primarily attributable to decreases of US$688.2 million at The Venetian Macao and US$482.8 million at Sands Cotai Central,
driven by a decrease in volume in all segments.
2.
MANAGEMENT DISCUSSION
AND ANALYSIS
The following table summarizes the results of our casino activity:
Six months ended June 30,
2015 2014 Change
(US$ in millions, except percentages and points)
The Venetian Macao
Total net casino revenues 1,297.0 1,985.2(34.7)%
Non-Rolling Chip drop 3,545.0 4,645.1(23.7)%
Non-Rolling Chip win percentage 25.5% 25.9%(0.4)pts
Rolling Chip volume 16,150.9 27,645.2(41.6)%
Rolling Chip win percentage 2.95% 3.47%(0.52)pts
Slot handle 2,035.7 2,798.3(27.3)%
Slot hold percentage 4.9% 5.0%(0.1)pts
Sands
Cotai Central
Total net casino revenues 963.0 1,445.8(33.4)%
Non-Rolling Chip drop 3,107.7 3,682.3(15.6)%
Non-Rolling Chip win percentage 21.5% 22.2%(0.7)pts
Rolling Chip volume 10,909.5 27,909.7(60.9)%
Rolling Chip win percentage 3.05% 2.89% 0.16pts
Slot handle 3,144.4 3,788.1(17.0)%
Slot hold percentage 3.4% 3.6%(0.2)pts
The Plaza
Macao
Total net casino revenues 290.5 534.9(45.7)%
Non-Rolling Chip drop 505.7 718.6(29.6)%
Non-Rolling Chip win percentage 22.4% 25.1%(2.7)pts
Rolling Chip volume 8,143.3 14,841.6(45.1)%
Rolling Chip win percentage 3.20% 3.42%(0.22)pts
Slot handle 260.8 460.2(43.3)%
Slot hold percentage 5.4% 5.1% 0.3pts
Sands Macao
Total net casino revenues 448.2 605.7(26.0)%
Non-Rolling Chip drop 1,559.0 2,173.2(28.3)%
Non-Rolling Chip win percentage 19.5% 17.7% 1.8pts
Rolling Chip volume 4,854.4 10,032.1(51.6)%
Rolling Chip win percentage 3.36% 2.87% 0.49pts
Slot handle 1,365.7 1,635.6(16.5)%
Slot hold percentage 3.6% 3.8%(0.2)pts
Net mall
revenues for the six months ended June 30, 2015 were US$181.3 million, an increase of US$33.4 million, or 22.6%, compared to US$147.9 million for the six months ended June 30, 2014. The increase was primarily driven by the opening of the
third phase of the Shoppes at Cotai Central in June 2014 and higher base fees due to contract renewals and additional stores opened after the remodeling at the Shoppes at Four Seasons and the Shoppes at Venetian.
SANDS
CHINA LTD. Interim Report 2015
Net room revenues for the six months ended June 30, 2015 were US$154.0
million, a decrease of US$10.9 million, or 6.6%, compared to US$164.9 million for the six months ended June 30, 2014. The decrease was mainly driven by the slowdown in the Macao gaming industry.
The following table summarizes our room activity. Information in this table takes into account rooms provided to customers
on a complimentary basis.
Six months ended June 30,
2015 2014 Change
(US$, except percentages and points)
The Venetian
Macao
Gross room revenues (in millions) 110.6 126.6(12.6)%
Occupancy rate 84.0% 91.7%(7.7)pts
Average daily rate 255 265(3.8)%
Revenue per
available room 214 243(11.9)%
Sands Cotai Central
Gross room revenues (in millions) 135.2 152.7(11.5)%
Occupancy rate 80.1% 86.9%(6.8)pts
Average daily rate 164 173(5.2)%
Revenue per
available room 132 150(12.0)%
The Plaza Macao
Gross room revenues (in millions) 21.6 24.7(12.6)%
Occupancy rate 80.2% 86.4%(6.2)pts
Average daily rate 395 419(5.7)%
Revenue per
available room 317 363(12.7)%
Sands Macao
Gross room revenues (in millions) 11.3 12.8(11.7)%
Occupancy rate 99.0% 97.6% 1.4pts
Average daily rate 222 254(12.6)%
Revenue per
available room 220 248(11.3)%
Net food and beverage revenues for the six months ended June 30, 2015 were
US$74.3 million, a decrease of US$9.8 million, or 11.7%, compared to US$84.1 million for the six months ended June 30, 2014.
Net convention, ferry, retail and other revenues for the six months ended June 30, 2015 were US$108.3 million, an increase of US$1.4 million, or 1.3%, compared to US$106.9 million for
the six months ended June 30, 2014. The increase was primarily driven by our ferry operations.
2.
MANAGEMENT DISCUSSION
AND ANALYSIS
Operating Expenses
Our operating expenses
consisted of the following:
Six months ended June 30,
2015 2014 Percent change
(US$ in millions, except percentages)
Casino
1,892.8 2,793.0(32.2)%
Mall 17.9 19.8(9.6)%
Rooms 36.1 36.5(1.1)%
Food and beverage 64.5 69.0(6.5)%
Convention,
ferry, retail and other 91.6 105.7(13.3)%
Provision for doubtful accounts 29.6 24.5 20.8%
General and administrative 298.4 300.0(0.5)%
Corporate 37.9 29.3 29.4%
Pre-opening 19.3
20.3(4.9)%
Depreciation and amortization 268.5 257.3 4.4%
Net foreign exchange gains(1.1)(1.2)(8.3)%
Loss on disposal of property and equipment,
investment properties and intangible assets 15.5 1.4 1,007.1%
Total operating expenses 2,771.0 3,655.4(24.2)%
Operating expenses were US$2,771.0 million for the six months ended June 30, 2015, a decrease of US$884.4 million, or 24.2%, compared to US$3,655.4 million for the six months ended
June 30, 2014. The decrease in operating expenses was primarily attributed to decreases in business volume across all properties, as well as our cost control measures.
Casino expenses for the six months ended June 30, 2015 were US$1,892.8 million, a decrease of US$900.2 million, or 32.2%, compared to US$2,793.0 million for the six months ended
June 30, 2014. The decrease was primarily due to a decrease in gaming taxes as a result of decreased gaming revenues, decreases in gaming promoter commissions, as well as the implementation of certain cost control measures.
Mall expenses for the six months ended June 30, 2015 were US$17.9 million, a decrease of US$1.9 million, or 9.6%,
compared to US$19.8 million for the six months ended June 30, 2014. The decrease was mainly due to lower common area maintenance costs.
Room expenses for the six months ended June 30, 2015 were US$36.1 million, a decrease of US$0.4 million, or 1.1%, compared to US$36.5 million for the six months ended June 30,
2014. The decrease was mainly driven by decreases in payroll and other operating expenses as a result of lower hotel occupancy.
Food and beverage expenses for the six months ended June 30, 2015 were US$64.5 million, a decrease of US$4.5 million, or 6.5%, compared to US$69.0 million for the six months ended
June 30, 2014. The decrease was primarily driven by decreases in cost of sales and other operating expenses consistent with lower business volume.
SANDS
CHINA LTD. Interim Report 2015
Convention, ferry, retail and other expenses for the six months ended
June 30, 2015 were US$91.6 million, a decrease of US$14.1 million, or 13.3%, compared to US$105.7 million for the six months ended June 30, 2014. The decrease was primarily driven by a decrease in contract entertainment expenses and lower
fuel cost for our ferry operations.
Provision for doubtful accounts expenses were US$29.6 million for the six
months ended June 30, 2015, an increase of US$5.1 million, or 20.8%, compared to US$24.5 million for the six months ended June 30, 2014. The increase was mainly driven by provisions for casino rolling business.
General and administrative expenses were US$298.4 million for the six months ended June 30, 2015, a decrease of
US$1.6 million, or 0.5%, compared to US$300.0 million for the six months ended June 30, 2014. The decrease was mainly driven by decreases in marketing and utilities expenses, as well as other cost control measures, partially offset by an
increase in fixed property expense due to a reversal of property tax recorded in 2014.
Corporate expenses were
US$37.9 million for the six months ended June 30, 2015, an increase of US$8.6 million, or 29.4%, compared to US$29.3 million for the six months ended June 30, 2014. The increase was mainly driven by increases in royalty fees, payroll and
corporate legal expenses.
Pre-opening expenses were US$19.3 million for the six months ended June 30,
2015, a decrease of US$1.0 million, or 4.9%, compared to US$20.3 million for the six months ended June 30, 2014. Pre-opening expenses were primarily for The Parisian Macao and the St. Regis tower at Sands Cotai Central.
Depreciation and amortization expense was US$268.5 million for the six months ended June 30, 2015, an increase of
US$11.2 million, or 4.4%, compared to US$257.3 million for the six months ended June 30, 2014. The increase was primarily due to expansions and additions at Sands Cotai Central and The Venetian Macao.
Loss on disposal of property and equipment, investment properties and intangible assets was US$15.5 million for the six
months ended June 30, 2015, compared with a loss of US$1.4 million for the six months ended June 30, 2014. The increase was primarily related to dispositions at our operating properties.
9
2.
MANAGEMENT DISCUSSION
AND ANALYSIS
Adjusted EBITDA(1)
The following table summarizes
information related to our segments:
Six months ended June 30,
2015 2014 Percent change
(US$ in millions, except percentages)
The
Venetian Macao 526.5 872.9(39.7)%
Sands Cotai Central 319.6 513.0(37.7)%
The Plaza Macao 118.8 180.8(34.3)%
Sands Macao 123.2 173.0(28.8)%
Ferry and other
operations 8.0(2.4) N.M.
Total adjusted EBITDA 1,096.2 1,737.4(36.9)%
Adjusted EBITDA for the six months ended June 30, 2015 was US$1,096.2 million, a decrease of US$641.2 million, or
36.9%, compared to US$1,737.4 million for the six months ended June 30, 2014. The decrease was driven by revenue decreases across all business segments except for the mall, as a result of the overall market slowdown in the Macao gaming
industry. The management team continues to focus on operational efficiencies and cost control measures throughout both the gaming and non-gaming areas of the business, maintaining a market-leading adjusted EBITDA.
(1) Adjusted EBITDA is profit attributable to equity holders of the Company before share-based compensation, corporate
expense, pre-opening expense, depreciation and amortization, net foreign exchange gains/(losses), gain/(loss) on disposal of property and equipment, investment properties and intangible assets, fair value losses on financial assets at fair value
through profit or loss, interest, loss on modification or early retirement of debt and income tax benefit/(expense). Adjusted EBITDA is used by management as the primary measure of operating performance of the Group’s properties and to compare
the operating performance of the Group’s properties with that of its competitors. However, adjusted EBITDA should not be considered in isolation; construed as an alternative to profit or operating profit; as an indicator of the Group’s
IFRS operating performance, other combined operations or cash flow data; or as an alternative to cash flow as a measure of liquidity. Adjusted EBITDA as presented by the Group may not be directly comparable to other similarly titled measures
presented by other companies.
N.M. — Not Meaningful
Interest Expense
The following table summarizes information related to interest expense:
Six months ended June 30,
2015 2014 Percent
change
(US$ in millions, except percentages)
Interest and other nance costs 40.5 41.9(3.3)%
Less — capitalized interest(10.1)(3.7) 173.0%
Interest expense, net 30.5 38.2(20.2)%
10
SANDS
CHINA LTD. Interim Report 2015
Interest expense, net of amounts capitalized, was US$30.5 million for the six
months ended June 30, 2015, compared to US$38.2 million for the six months ended June 30, 2014. The decrease was primarily due to a US$6.4 million increase in capitalized interest primarily related to the construction of The Parisian Macao
and the remaining phase of Sands Cotai Central.
Profit for the Period
Profit for the six months ended June 30, 2015 was US$734.5 million, a decrease of US$635.9 million, or 46.4%,
compared to US$1,370.4 million for the six months ended June 30, 2014.
2.2 LIQUIDITY AND CAPITAL
RESOURCES
We fund our operations through cash generated from our operations and our debt financing.
In April 2015, we entered into a joinder agreement (the “Joinder Agreement”) to the 2011 VML Credit
Facility. Under the Joinder Agreement, certain lenders have agreed to provide a new term loan equal to US$1.0 billion (the “2011 VML Accordion Term”), which was fully funded on April 30, 2015. During the six months ended June 30,
2015, we made repayments of US$820.2 million on the Extended 2011 VML Revolving Facility.
As at June 30,
2015, we had US$2.0 billion of available borrowing capacity under the Extended 2011 VML Revolving Facility.
As
at June 30, 2015, we had cash and cash equivalents of US$1.96 billion, which was primarily generated from our operations.
Cash Flows — Summary
Our cash flows
consisted of the following:
Six months ended June 30,
2015 2014
(US$ in millions)
Net cash generated from
operating activities 901.2 1,671.0
Net cash used in investing activities(589.0)(418.4)
Net cash used in nancing activities(893.3)(2,690.2)
Net decrease in cash and cash equivalents(581.1)(1,437.5)
Cash and cash equivalents at beginning of period 2,535.3 2,943.4
Effect of exchange rate on cash and cash equivalents 1.2 1.9
Cash and cash equivalents at end of period 1,955.4 1,507.8
11
SANDS
CHINA LTD. Interim Report 2015
2. MANAGEMENT DISCUSSION
AND ANALYSIS
Cash Flows — Operating Activities
We derive
most of our operating cash flows from our casino, mall and hotel operations. Net cash generated from operating activities for the six months ended June 30, 2015 was US$901.2 million, a decrease of US$769.8 million, or 46.1%, compared to
US$1,671.0 million for the six months ended June 30, 2014. The decrease in net cash generated from operating activities was primarily due to the decrease in operating income.
Cash Flows — Investing Activities
Net cash used in investing activities for the six months ended June 30, 2015 was US$589.0 million and was primarily attributable to capital expenditures for development projects, as
well as maintenance spending. Capital expenditures for the six months ended June 30, 2015, totaled US$599.6 million, including US$533.1 million for construction activities at The Parisian Macao and Sands Cotai Central, and US$66.5 million for
our operations, mainly at The Venetian Macao and Sands Macao.
Cash Flows — Financing Activities
For the six months ended June 30, 2015, net cash used in financing activities was US$893.3 million, which
was primarily attributable to US$1,030.2 million in interim dividend payments and US$820.2 million for repayments of borrowings under the Extended 2011 VML Revolving Facility, partially offset by US$999.3 million in proceeds from borrowings under
the 2011 VML Accordion Term.
2.3 CAPITAL EXPENDITURES
Capital expenditures were used primarily for new projects and to renovate, upgrade and maintain existing properties. Set
forth below is historical information on our capital expenditures, excluding capitalized interest and construction payables:
Six months ended June 30,
2015 2014
(US$ in millions)
The Venetian Macao 43.4 44.2
Sands Cotai Central
219.1 156.5
The Plaza Macao 8.2 21.9
Sands Macao 13.5 14.8
Ferry and other operations
1.4 1.1
The Parisian Macao 314.0 189.6
Total capital expenditures 599.6 428.0
Our capital expenditure plans are significant. Sands Cotai Central opened in phases, beginning in April 2012. We have begun construction activities on the St. Regis tower, the remaining
phase of the project, which will include a fourth hotel and mixed-use tower under the St. Regis brand that is expected to open at the end of 2015, subject to Macao Government approval. The total cost to complete the remaining phase of the project is
expected to be approximately US$380 million.
12
SANDS
CHINA LTD. Interim Report 2015
We have begun construction on The Parisian Macao, an integrated resort that
will be connected to The Venetian Macao and The Plaza Macao. The Parisian Macao is intended to include a gaming area (to be operated under our gaming subconcession), a hotel with over 3,000 rooms and suites and retail, entertainment, dining and
meeting facilities. We expect the cost to design, develop and construct The Parisian Macao will be approximately US$2.7 billion, inclusive of payments made for the land premium. As with projects of this nature, we will continue to analyze options
for both a full and phased opening of the facility, which is anticipated to open in the second half of 2016, subject to Macao Government approval. We had capitalized construction costs of US$1.18 billion, including land, as at June 30, 2015.
These investment plans are subject to change based upon the execution of our business plan, the progress of
our capital projects, market conditions and the outlook on future business conditions.
2.4 CAPITAL COMMITMENTS
Future commitments for property and equipment that are not recorded in the financial statements herein are as
follows:
June 30, December 31,
2015 2014
(US$ in millions)
Contracted but not provided for
1,397.4 1,884.5
Authorized but not contracted for 1,019.5 1,161.3
Total capital commitments 2,416.9 3,045.8
On January 23, 2015, the Board declared an interim dividend of HK$0.99 (equivalent to US$0.128) per share. This interim dividend, amounting in aggregate to HK$7.99 billion (equivalent
to US$1.03 billion), was paid on February 27, 2015.
On June 17, 2015, the Shareholders approved a
final dividend of HK$1.00 (equivalent to US$0.129) per share for the year ended December 31, 2014 to Shareholders whose names appeared on the register of members of the Company on June 24, 2015. The final dividend, amounting in aggregate
to HK$8.07 billion (equivalent to US$1.04 billion), was paid on July 15, 2015.
The Board does not
recommend the payment of an interim dividend for the six months ended June 30, 2015.
2.6 PLEDGE OF FIXED
ASSETS
We have pledged a substantial portion of our fixed assets to secure our loan facilities. As at
June 30, 2015, we have pledged leasehold interests in land; buildings; building, land and leasehold improvements; furniture, fittings and equipment; construction in progress; and vehicles with an aggregate net book value of approximately
US$7.07 billion (December 31, 2014: US$7.06 billion).
13
2.
MANAGEMENT
DISCUSSION
AND ANALYSIS
2.7 CONTINGENT LIABILITIES AND RISK
FACTORS
The Group has contingent liabilities arising in the ordinary course of business. Management has made
estimates for potential litigation costs based upon consultation with legal counsel. Actual results could differ from these estimates; however, in the opinion of management, such litigation and claims will not have a material adverse effect on our
financial condition, results of operations or cash flows.
Under the land concession for The Parisian Macao,
which is anticipated to open in the second half of 2016 (subject to Macao Government approval), we are required to complete the development by April 2016. The land concession for Sands Cotai Central contains a similar requirement that the
development be completed by December 2016. We have applied for an extension from the Macao Government to complete The Parisian Macao as we believe we will be unable to meet the April 2016 deadline. Should we determine that we are unable to complete
Sands Cotai Central by December 2016, we would then also expect to apply for another extension from the Macao Government. If we are unable to meet the Sands Cotai Central deadline and the deadlines for either development are not extended, we could
lose our land concessions for The Parisian Macao or Sands Cotai Central, which would prohibit us from operating any facilities developed under the respective land concessions. As a result, the Group could record a charge for all or some portion of
the US$1.18 billion or US$4.78 billion in capitalized construction costs including land, as at June 30, 2015, related to The Parisian Macao and Sands Cotai Central, respectively.
2.8 CAPITAL RISK MANAGEMENT
The Group’s primary objective when managing capital is to safeguard the Group’s ability to continue as a going concern in order to provide returns for Shareholders and benefits
for other stakeholders, by pricing products and services commensurately with the level of risk.
The capital
structure of the Group consists of debt, which includes borrowings (including current and non-current borrowings as shown in note 15 to the condensed consolidated financial statements), cash and cash equivalents, and equity attributable to
Shareholders, comprising issued share capital and reserves.
The Group actively and regularly reviews and
manages its capital structure to maintain the net debt-to-capital ratio (gearing ratio) at an appropriate level based on its assessment of the current risk and circumstances. This ratio is calculated as net debt divided by total capital. Net debt is
calculated as interest-bearing borrowings, net of deferred financing costs, less cash and cash equivalents and restricted cash and cash equivalents. Total capital is calculated as equity, as shown in the consolidated balance sheet, plus net debt.
June 30, December 31,
2015 2014
(US$ in millions, except percentages)
Interest-bearing borrowings, net of deferred financing costs 3,294.5 3,115.4
Less: cash and cash equivalents(1,955.4)(2,535.3)
restricted cash and cash equivalents(7.1)(6.5)
Net debt 1,331.9 573.6
Total equity 5,106.4 6,429.3
Total capital
6,438.3 7,002.9
Gearing ratio 20.7% 8.2%
14
SANDS
CHINA LTD. Interim Report 2015
The increase in the gearing ratio during the six months ended June 30,
2015 was primarily due to interim dividend payments of US$1.03 billion.
2.9 FOREIGN EXCHANGE RISK
The Group’s foreign currency transactions are mainly denominated in US$. The majority of assets and liabilities are
denominated in US$, HK$ and MOP. The Group is subject to foreign exchange rate risk arising from future commercial transactions and recognized assets and liabilities that are denominated in a currency other than MOP, which is the functional currency
of major operating companies within the Group. The Group currently does not have a foreign currency hedging policy.
2.10 BUSINESS REVIEW AND PROSPECTS
Our business
strategy is to continue to successfully execute our Cotai Strip developments and to leverage our integrated resort business model to create Asia’s premier gaming, leisure and convention destination. The Company continues to execute on the
strategies outlined in our 2014 Annual Report. These strategies have proven to be successful in the first half of 2015 and we are confident they will continue into the future.
Sands Cotai Central
Sands Cotai Central is
located across the street from The Venetian Macao and The Plaza Macao and is our largest integrated resort on Cotai. Sands Cotai Central opened in phases, beginning in April 2012. The property currently features three hotel towers: the first hotel
tower, consisting of 636 five-star rooms and suites under the Conrad brand and 1,224 four-star rooms and suites under the Holiday Inn brand; the second hotel tower, consisting of 1,796 rooms and suites under the Sheraton brand; and the third hotel
tower, consisting of 2,067 rooms and suites under the Sheraton brand. Within Sands Cotai Central, we also own and currently operate approximately 370,000 square feet of gaming space, approximately 350,000 square feet of meeting space and
approximately 331,000 square feet of retail space, as well as entertainment and dining facilities. We have begun construction activities on the St. Regis tower, the remaining phase of the project, which will include a fourth hotel and mixed-use
tower under the St. Regis brand that is expected to open at the end of 2015, subject to Macao Government approval. The total cost to complete the remaining phase of the project is expected to be approximately US$380 million.
The Parisian Macao
The Parisian Macao, which is currently expected to open in the second half of 2016 (subject to Macao Government approval), is intended to include a gaming area (to be operated under our
gaming subconcession), a hotel with over 3,000 rooms and suites and retail, entertainment, dining and meeting facilities. We expect the cost to design, develop and construct The Parisian Macao will be approximately US$2.7 billion, inclusive of
payments made for the land premium. We had capitalized construction costs of US$1.18 billion for The Parisian Macao, including land, as at June 30, 2015.
15
BE
IMMERSED IN
LUXURY DUTY FREE SHOPPING.
SANDS
CHINA LTD. Interim Report 2015
3. CORPORATE
GOVERNANCE
3.1 HUMAN RESOURCES
As at June 30, 2015, our
team member profile was as follows:
Number of Full-time Team Members: 24,849 Average Age: 39 Gender Ratio:
Male 47% Female 53% Total Number of Nationalities: 54
Number of Team Members of Hotel Partners: 2,134 Number
of Full-time Team Members: 24,849
Total Number of Team Members: 26,983
Sands China Ltd. announced at the beginning of July 2014 that a special reward will be paid to full-time manager grade and
below team members. The reward is equivalent to one month’s salary and will be paid every July together with the team members’ salary until 2017. There have been no other material changes to the information disclosed in the 2014 Annual
Report regarding remuneration of team members, remuneration policies, and team members’ development.
3.2
ENVIRONMENT
We recognize the impact our business has on the environment and we continue to strive to achieve
the goals we have set ourselves in the areas of resource conservation and reducing our environmental foot print. We encourage and are grateful to those Shareholders who have elected to receive our annual and interim reports via electronic means,
thereby reducing the need to print hard copies of our reports. Should you wish to start receiving an electronic copy of our annual and interim reports, please refer to page 58 of this report for more information.
To minimize the impact on our environment, this 2015 Interim Report is printed on recycled paper using soy ink.
More information about Sands ECO360° Global Sustainability Strategy and the Environmental Reports
published by Las Vegas Sands Corp. covering its global properties is available at http://www.sands.com/sands-eco-360/our-vision.html.
17
THE
ENVIRONMETNTALLY RESPONSIBLE choice for green meetings worldwide
28 million
kWh of Energy was saved by 30 million
installing LED and other energy
efficient lights,
and through gallons of water were saved in 2014
optimization of cooling and through water flow controllers,
Earth Check heating systems low-flow shower heads and an
automatic irrigation system
The Venetian Macao received
a Bronze Benchmarked
Certification
certification in 2014 • IMEX-GMIC Green Supplier Award 2014
• China Green Enterprise Award 2014 for the
EARTH HOUR category of “Outstanding Sustainable
Development Enterprise”
Earth Hour Every
Month Macao Green Hotel Gold Award —
implemented at Sands Cotai Central
Sands China properties • ISO20121 Accreditation —
15 hotels in Macao have taken Event Sustainability Management System
our ‘I Will If You Will Challenge’• China Hotelier Award 2014
to join Earth Hour Every Month
• Certificate of Commendation from HKEx for
Carbon Footprint Reporting
92% • CEM Energy Saving Contest Award 2014
(Winner — Sands Macao;
portion of our suite lighting and Merit Award — Sands Cotai Central)
other operational areas that use
the latest LED
and other energy 100
saving technologies
• number of recycling points at
the Sands China facilities are used
CONTRIBUTION
EURO V & for collecting and separation of
recyclable materials
TO COMMUNITY EURO IV • 3,900 tons of waste diverted
50 community activities including 15 A permanent electric bus through recycling initiatives
green action events in 2014 launched in August 2014 and in 2014
One project day hosted to build 25 shuttle buses fitted with
20,000 hygiene kits for charities in Asia battery operated
and local community air-conditioning
• Sands China Green Fund granted
scholarships to 6 students in the
2013-2014 academic year
18
SANDS
CHINA LTD. Interim Report 2015
3.3 CORPORATE GOVERNANCE PRACTICES
Good corporate governance underpins the creation of Shareholder value at Sands China and maintaining the highest standards
of corporate governance is a core responsibility of the Board. An effective system of corporate governance requires that our Board approves strategic direction, monitors performance, oversees effective risk management and leads the creation of the
right compliant culture across the organization. It also gives our investors confidence that we are exercising our stewardship responsibilities with due skill and care.
To ensure that we adhere to high standards of corporate governance, we have developed our own corporate governance principles and guidelines that set out how corporate governance operates
in practice within the Company. This is based on the policies, principles and practices set out in the Code and draws on other best practices.
The Board is of the view that throughout the six months ended June 30, 2015, save as disclosed below, the Company fully complied with all the code provisions and certain recommended
best practices set out in the Code.
Code Provision A.2.1
Mr. Sheldon Gary Adelson, the Chairman of the Company, was appointed as the Chief Executive Officer of the Company
with effect from March 6, 2015 following the retirement of the Company’s previous Chief Executive Officer, Mr. Edward Matthew Tracy. The roles of Chairman and Chief Executive Officer have been performed by Mr. Adelson since then.
Although under code provision A.2.1 of the Code, the roles of chairman and chief executive officer should be separate and should not be performed by the same individual, the combination of the roles of chairman and chief executive officer by
Mr. Adelson is considered to be in the best interests of the Company and its Shareholders as a whole. The Company believes that the combined roles of Mr. Adelson promotes better leadership for both the Board and management and allows more
focus on developing business strategies and the implementation of objectives and policies. The structure is supported by the Company’s well established corporate governance structure and internal control policies.
3.4 MODEL CODE FOR SECURITIES TRANSACTIONS
The Company has developed the Company Code for securities transactions by the Directors and relevant employees who are likely to be in possession of unpublished inside information of the
Company on terms no less exacting than the Model Code. Following specific enquiry by the Company, all Directors have confirmed that they have complied with the Company Code and, therefore, with the Model Code throughout the six months ended
June 30, 2015 and to the date of this Interim Report.
3.5 BOARD AND BOARD COMMITTEES COMPOSITION
The following changes were made to the composition of the Board and the Board Committees of the Company during
the six months ended June 30, 2015:
On March 6, 2015, Mr. Edward Matthew Tracy retired as the
President and Chief Executive Officer, an Executive Director and a member of the Capex Committee of the Company.
Mr. Sheldon Gary Adelson was appointed as the Chief Executive Officer of the Company and was re-designated as an
Executive Director of the Company with effect from March 6, 2015.
Mr. Robert Glen Goldstein was
appointed as the Interim President and a member of the Capex Committee of the Company and was re-designated as an Executive Director of the Company with effect from March 6, 2015.
19
3.
CORPORATE
GOVERNANCE
On April 1, 2015, Mr. David Alec Andrew Fleming retired as the Company Secretary, General Counsel, Authorized Representative of the Company and the Alternate Director to
Mr. Michael Alan Leven, a Non-Executive Director of the Company.
The Directors of the Company as at the
date of this Interim Report are:
Title Note
Executive Directors
Sheldon Gary Adelson Chairman of the Board and Re-designated March 6, 2015
Chief Executive Officer
Robert Glen Goldstein
Interim President Re-designated March 6, 2015
Toh Hup Hock Executive Vice President and Appointed
June 30, 2010
Chief Financial Officer
Non-Executive Directors
Michael Alan Leven Re-designated July 27, 2011
Charles Daniel Forman Elected May 30, 2014
Independent Non-Executive Directors
Iain Ferguson
Bruce Appointed October 14, 2009
Chiang Yun Appointed October 14, 2009
David Muir Turnbull Appointed October 14, 2009
Victor Patrick Hoog Antink Appointed December 7, 2012
Steven Zygmunt Strasser Elected May 31, 2013
The Board has established four committees, being the Audit Committee, the Remuneration Committee, the Nomination
Committee and the Capex Committee. The table below details the membership and composition of each of the four
committees as at the date of this Interim Report.
Audit Remuneration Nomination Capex
Director Committee Committee Committee Committee
Sheldon Gary Adelson — — Chairman —
Robert Glen Goldstein — — — Member(1)
Toh Hup Hock — — — —
Michael Alan Leven — — — Chairman
Charles Daniel Forman — — — —
Iain Ferguson Bruce Member Member Member —
Chiang Yun Member — — —
David Muir Turnbull — Chairman Member —
Victor Patrick Hoog Antink Chairman Member — Member
Steven Zygmunt Strasser Member Member — —
| (1) |
|
Appointed by a resolution of the Board on January 23, 2015 |
20
SANDS
CHINA LTD. Interim Report 2015
3.6 DISCLOSURE OF DIRECTORS’ INFORMATION PURSUANT TO RULE 13.51B(1) OF THE
LISTING RULES
Other Major Appointment
On May 6, 2015, Ms. Chiang Yun, an Independent Non-Executive Director of the Company, was appointed as an Independent Non-Executive Director, the chairman of the Remuneration
Committee and a member of the Audit Committee and the Nomination Committee of Pacific Century Premium Developments Limited, listed on the Stock Exchange (stock code: 432).
On June 8, 2015, Mr. Toh Hup Hock, an Executive Director of the Company, was appointed as a committee member of the Tourism Development Committee of the Macao Government.
3.7 AUDIT COMMITTEE REVIEW
The Audit Committee has reviewed the accounting policies adopted by the Group and the unaudited condensed consolidated financial statements for the six months ended June 30, 2015, and
was of the opinion that the preparation of such interim results complied with the applicable accounting standards and requirements and that adequate disclosures have been made. All of the Audit Committee members are Independent Non-Executive
Directors, with Mr. Victor Patrick Hoog Antink (Chairman of the Audit Committee) and Mr. Iain Ferguson Bruce possessing the appropriate professional qualifications and accounting and related financial management expertise.
3.8 INTERESTS OF DIRECTORS AND CHIEF EXECUTIVES
The interests of each of the Directors and Chief Executives in the shares, underlying shares and debentures of the Company and any of the Company’s associated corporations (within the
meaning of Part XV of the SFO) as at June 30, 2015, as recorded in the register required to be kept under Section 352 of Part XV of the SFO or as otherwise notified to the Company and the Stock Exchange pursuant to the Model Code, are set
out in the table and explanatory notes below:
Approximate
percentage of
Number of shareholding
Name of Director Company
Nature of interest Shares interest
Sheldon Gary Adelson Company Interest in a controlled 5,657,814,885(L)
70.12%
corporation
Toh Hup Hock Company Beneficial owner 981,200(L)(4) 0.01%
Approximate
percentage of
Associated Number of shareholding
Name of Director corporation Nature of interest securities interest
Sheldon Gary Adelson LVS Beneficial owner 66,201,340(L)(1) 8.30%
Family Interest 328,729,775(L)(2) 41.23%
Robert
Glen Goldstein LVS Beneficial owner 2,867,508(L)(3) 0.36%
Toh Hup Hock LVS Beneficial owner 60,000(L)(4) 0.01%
Michael Alan Leven LVS Beneficial owner 777,036(L)(5) 0.10%
Charles Daniel Forman LVS Beneficial owner 216,301(L)(6) 0.03%
The letter “L” denotes the person’s long position in such shares/securities.
21
3.
CORPORATE
GOVERNANCE
Notes:
(1) This amount includes
(a) 65,910,537 shares of LVS’s common stock (see note 7), (b) 44,287 unvested shares of LVS’s restricted stock, and (c) 246,516 options to purchase 246,516 shares in LVS’s common stock, of which 13,793 are vested and
exercisable. Mr. Adelson and his wife together are entitled to control the exercise of one-third or more of the voting power at stockholders’ meetings of LVS. LVS’s interests in our Company are set out in the below paragraph
“Interests of Substantial Shareholders”.
(2) This amount includes (a) 93,779,145 shares of
LVS’s common stock held by Dr. Miriam Adelson, (b) 1,772,576 shares of LVS’s common stock held by trusts for the benefit of Dr. Adelson and her family members over which Dr. Adelson, as trustee, retains sole voting
control, (c) 2,709,026 shares of LVS’s common stock held by trusts or custodial accounts for the benefit of Dr. Adelson’s family members over which Dr. Adelson, as trustee or in another fiduciary capacity, retains sole
voting control and dispositive power, (d) 217,902,318 shares of LVS’s common stock held by trusts for the benefit of Dr. Adelson and her family members over which Dr. Adelson, as trustee, shares dispositive power, and
(e) 12,566,710 shares of LVS’s common stock held by Adfam Investment Company LLC over which Dr. Adelson, as co-manager, shares voting and dispositive control with Mr. Adelson.
(3) This amount includes (a) 169,111 shares of LVS’s common stock (see note 7), (b) 225,000 unvested
LVS’s restricted stock, and (c) 2,473,397 options to purchase 2,473,397 shares in LVS’s common stock, of which 223,397 are vested and exercisable.
(4) These amounts include (a) 538,000 shares of the Company, (b) 443,200 unvested restricted share units of the Company, and (c) 60,000 options to purchase 60,000 shares of
LVS’s common stock, all of which are vested and exercisable.
(5) This amount includes (a) 767,036
shares of LVS’s common stock (see note 7), of which 407,565 shares are held by a corporation which Mr. Leven controls one-third or more of the voting power at its general meetings, or the corporation or its directors are accustomed to act
in accordance with his directions, and (b) 10,000 options to purchase 10,000 shares in LVS’s common stock, all of which are vested and exercisable.
(6) This amount includes (a) 206,301 shares of LVS’s common stock (see note 7), and (b) 10,000 options to purchase 10,000 shares in LVS’s common stock, all of which are
vested and exercisable.
(7) In the annual and interim reports of the Company published prior to 2012, the
Company has disclosed LVS’s common stock and LVS’s vested restricted stock separately. From the 2012 interim report onwards, the total number of LVS’s common stock includes the number of vested LVS’s restricted stock and
LVS’s common stock.
None of the Directors or the Chief Executives had short positions in respect of
shares, underlying shares and debentures of the Company and its associated corporations (within the meaning of Part XV of the SFO) as at June 30, 2015.
Save as disclosed above, so far as was known to the Directors, as at June 30, 2015, none of the Directors or the Chief Executives of the Company had, pursuant to Divisions 7 and 8 of
Part XV of the SFO, nor were they taken or deemed to have under such provisions of the SFO, any interest or short position in any shares or underlying shares or interest in debentures of the Company or any of its associated corporations (within the
meaning of Part XV of the SFO) that were required to be notified to the Company and the Stock Exchange, or any interests that were required, pursuant to Section 352 of the SFO, to be entered into the register referred to therein, or any
interests that were required, pursuant to the Model Code, to be notified to the Company and the Stock Exchange.
As at June 30, 2015, save as disclosed above, none of the Directors nor the Chief Executives of the Company
(including their spouses and children under 18 years of age) had any interest in, or had been granted, or exercised, any rights to subscribe for shares (or warrants or debentures, if applicable) of the Company and its associated corporations (within
the meaning of Part XV of the SFO).
22
SANDS
CHINA LTD. Interim Report 2015
3.9 INTERESTS OF SUBSTANTIAL SHAREHOLDERS
The interests of substantial Shareholders in the shares and underlying shares of the Company as at June 30, 2015, as
recorded in the register required to be kept under Section 336 of Part XV of the SFO or as the Company is aware, are set out in the table below.
The Company had been notified of the following substantial Shareholders’ interests in the shares of the Company as at June 30, 2015:
% of issued
Name of substantial Shareholder Capacity/Nature of interest Number of Shares share capital
Sheldon Gary Adelson Interest in a controlled corporation 5,657,814,885(L) 70.12%
Las Vegas Sands Corp. Interest in a controlled corporation 5,657,814,885(L) 70.12%
Las Vegas Sands, LLC Interest in a controlled corporation 5,657,814,885(L) 70.12%
Venetian Casino Resort, LLC Interest in a controlled corporation 5,657,814,885(L) 70.12%
LVS (Nevada) International Interest in a controlled corporation 5,657,814,885(L) 70.12%
Holdings, Inc.
LVS Dutch Finance CV Interest in a
controlled corporation 5,657,814,885(L) 70.12%
LVS Dutch Holding BV Interest in a controlled corporation
5,657,814,885(L) 70.12%
Sands IP Asset Management BV Interest in a controlled corporation 5,657,814,885(L)
70.12%
Venetian Venture Development Beneficial owner 5,657,814,885(L) 70.12%
Intermediate II
The letter “L” denotes the person’s long position in such shares.
As at June 30, 2015, the Company had not been notified of any short positions being held by any substantial Shareholder in the shares or underlying shares of the Company.
3.10 INTERESTS OF ANY OTHER PERSONS
Save as disclosed above, as at June 30, 2015, the Company had not been notified of any persons who had interests or short positions in the shares or underlying shares of the Company,
as recorded in the register required to be kept under Section 336 of Part XV of the SFO.
3.11 EQUITY
AWARD PLAN
On November 8, 2009, our Company adopted an Equity Award Plan for the purpose of attracting
able persons to enter and remain in the employment of our Group. The Equity Award Plan also provides a means whereby employees, Directors and consultants of our Group can acquire and maintain Share ownership, thereby strengthening their commitment
to the welfare of our Group and promoting an identity of interest between Shareholders and these persons.
Share Options
As at June 30, 2015, 62,878,991 options to purchase shares in the Company had been granted under the Equity Award Plan of which 21,055,661 options had been exercised and 18,191,459
options had lapsed.
23
3.
CORPORATE
GOVERNANCE
Details of the grant of share options and a summary of movements of the outstanding share options during the period under the Equity Award Plan were as follows:
Options to Subscribe for Ordinary Shares Granted under the Company’s Equity Award Plan
Weighted
average
closing price
of Shares
Closing price immediately
of Shares Number of
options before the
immediately dates on
Exercise before the outstanding outstanding which
Director & price per date of as at granted vested lapsed exercised as at options were
eligible Date Options Share grant Exercise January 1, during during during during June 30, exercised
employees granted granted HK$ HK$ period 2015 the period the period the period the period 2015 HK$
David Alec September 1, 2011 130,000 23.28 24.20 September 1, 2012– 32,500 — — — — 32,500 —
Andrew Fleming September 29, 2017
Other eligible March 31, 2010 16,876,100 11.63 12.10 March 31, 2011– 1,518,075 — — — 401,800 1,116,275 33.56
employees March 30, 2020
September 30, 2010 2,672,500 13.23 14.32 September 30, 2011– 497,950 — — — 201,000 296,950 32.55
September 29, 2020
January 17, 2011 2,746,300 18.57 19.14 January 17, 2012– 329,525 — 327,450 — 324,425 5,100 37.35
January 16, 2021
May 11, 2011 2,530,591 21.73 21.40 May 11, 2012– 707,996 — 389,148 — 141,725 566,271 32.19
May 10, 2021
August 30, 2011 1,584,400 22.48 22.80 August 30, 2012– 422,725 — — — — 422,725 —
August 29, 2021
November 24, 2011 2,671,000 20.23 20.95 November 24, 2012– 876,225 — — — 150,250 725,975 34.83
November 23, 2021
March 5, 2012 1,434,500 28.23 29.25 March 5, 2013– 481,600 — 200,175 — — 481,600 —
March 4, 2022
May 14, 2012 1,787,100 28.14 28.90 May 14, 2013– 1,139,400 — 381,775 — — 1,139,400 —
May 13, 2022
August 31, 2012 1,538,100 26.82 27.50 August 31, 2013– 1,366,100 — — — — 1,366,100 —
August 30, 2022
September 17, 2012 845,000 28.43 28.50 September 17, 2013– 260,000 — — — — 260,000 —
September 16, 2022
November 22, 2012 585,100 31.48 31.65 November 22, 2013– 585,100 — — — — 585,100 —
November 21, 2022
December 24, 2012 312,000 33.28 34.05 December 24, 2013– 312,000 — — — — 312,000 —
December 23, 2022
February 15, 2013 1,486,800 36.73 36.50 February 15, 2014– 1,340,200 — 371,700 — — 1,340,200 —
February 14, 2023
May 16, 2013 1,241,900 40.26 40.45 May 16, 2014– 591,900 — 99,225 146,250 — 445,650 —
May 15, 2023
September 18, 2013 1,058,500 46.78 47.65 September 18, 2014– 623,000 — — 174,750 — 448,250 —
September 17, 2023
November 13, 2013 749,600 53.95 54.70 November 13, 2014– 504,900 — — — — 504,900 —
November 12, 2023
February 24, 2014 2,602,300 59.35 58.90 February 24, 2015– 2,602,300 — 650,575 — — 2,602,300 —
February 23, 2024
March 18, 2014 3,238,800 62.94 62.25 March 18, 2015– 3,238,800 — 809,700 149,025 — 3,089,775 —
March 17, 2024
May 21, 2014 2,723,800 57.75 57.40 May 21, 2015– 2,723,800 — 629,525 205,700 — 2,518,100 —
May 20, 2024
June 18, 2014 1,071,400 53.64 53.10 June 18, 2015– 1,071,400 — 199,900 271,800 — 799,600 —
June 17, 2024
June 23, 2014 552,500 54.20 54.60 June 23, 2015– 552,500 — 138,125 — — 552,500 —
June 22, 2024
August 29, 2014 1,063,100 52.33 51.35 August 29, 2015– 1,063,100 — — 195,100 — 868,000 —
August 28, 2024
September 26, 2014 195,000 43.27 41.30 September 26, 2015– 195,000 — — — — 195,000 —
September 25, 2024
December 29, 2014 213,600 38.90 38.50 December 29, 2015– 213,600 — — — — 213,600 —
December 28, 2024
March 3, 2015 648,400 35.90 35.30 March 3, 2016– — 648,400 — — — 648,400 —
March 2, 2025
May 5, 2015 795,600 33.15 32.80 May 5, 2016– — 795,600 — — — 795,600 —
May 4, 2025
May 22, 2015 1,300,000
32.35 32.05 May 22, 2016– — 1,300,000 — — — 1,300,000 —
May 21,
2025
24
SANDS
CHINA LTD. Interim Report 2015
Notes:
1. The exercise price of the share options is determined upon the offer of grant of the options and should not be less than the higher of (a) the closing price per share of the
Company on the date of offer of such options, which must be a business day; (b) the average closing price per share of the Company for the five business days immediately preceding the date of offer of such options; and (c) the nominal
value per share of the Company.
2. Save as disclosed in note 3 below, the proportion of underlying shares in
respect of which the above share options will vest is as follows:
Proportion of underlying
shares in respect of which
the above share options
will vest is as follows:
Before the first anniversary of the date of grant of the option (the “Offer Anniversary”) None
From the first Offer Anniversary to the date immediately before the second Offer Anniversary One-quarter
From the second Offer Anniversary to the date immediately before the third Offer Anniversary Two-quarters
From the third Offer Anniversary to the date immediately before the fourth Offer Anniversary Three-quarters
From the fourth Offer Anniversary and thereafter All
c3. 130,000 share options granted to Mr. David Alec Andrew Fleming on September 1, 2011 were to vest according
to the above schedule. An amendment to the option agreement approved on November 6, 2014 changed the vesting date of the last quarter of these share options (the unvested portion) to July 1, 2017, the completion date of the consultant
agreement that became effective on July 1, 2015.
When the options are forfeited after the vesting date or
are still not exercised at the expiry date, the amount previously recognized in share-based compensation reserve will be transferred to retained earnings.
The Company estimates the fair value of options granted using the Black-Scholes option-pricing model. The weighted average fair value of options granted during the six months ended
June 30, 2015, measured as at the date of grant, was approximately US$0.95.
25
3.
CORPORATE
GOVERNANCE
Significant estimates and assumptions are required to be made in determining the parameters for applying the Black-Scholes option-pricing model, including estimates and assumptions
regarding the risk-free rate of return, expected dividend yield and volatility of the underlying shares and the expected life of the options. These estimates and assumptions could have a material effect on the determination of the fair value of the
share options and the amount of such equity awards expected to vest, which may in turn significantly impact the determination of the share-based compensation expense. The following assumptions were used to derive the fair values of options granted
during the six months ended June 30, 2015:
Weighted average volatility 44.8%
Expected term (in years) 4.0
Risk-free rate 0.7%
Expected dividends 6.0%
Restricted Share Units
As at June 30, 2015, 3,090,000 restricted share units had been granted under the Equity Award Plan. As a result of the Company cash-settling and planning to cash-settle certain future
unvested restricted share units on their vesting dates, 1,432,000 unvested restricted share units were modified from equity-settled to cash-settled. Of this amount, 700,095 restricted share units vested on a pro-rata basis in accordance with their
terms during the six months ended June 30, 2015 and were cash-settled.
Save as disclosed herein, no
options, restricted share units or any other share-based awards were granted under the Equity Award Plan or any equity award plan of the Group as at June 30, 2015 and no options, restricted share units or any other share-based awards were
cancelled during the period.
3.12 PURCHASE, SALE OR REDEMPTION OF THE COMPANY’S LISTED SHARES
Neither the Company, nor any of its subsidiaries purchased, sold or redeemed any of the listed shares of the Company
during the six months ended June 30, 2015.
26
SANDS
CHINA LTD. Interim Report 2014
4.1 REPORT ON REVIEW OF CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
TO THE BOARD OF DIRECTORS OF SANDS CHINA LTD.
(Incorporated in the Cayman Islands with limited liability)
INTRODUCTION
We have reviewed the condensed consolidated financial statements of Sands China Ltd. (the “Company”) and its subsidiaries (collectively referred to as the “Group”) set
out on pages 28 to 56, which comprises the consolidated balance sheet as at June 30, 2015 and the related consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity and condensed
consolidated statement of cash flows for the six-month period then ended, and certain explanatory notes. The Main Board Listing Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited require the preparation of a report
on interim financial information to be in compliance with the relevant provisions thereof and International Accounting Standard 34 Interim Financial Reporting (“IAS 34”). The directors of the Company are responsible for the preparation and
presentation of these condensed consolidated financial statements in accordance with IAS 34. Our responsibility is to express a conclusion on these condensed consolidated financial statements based on our review, and to report our conclusion solely
to you, as a body, in accordance with our agreed terms of engagement, and for no other purpose. We do not assume responsibility towards or accept liability to any other person for the contents of this report.
SCOPE OF REVIEW
We conducted our review in accordance with International Standard on Review Engagements 2410 “Review of Interim Financial Information Performed by the Independent Auditor of the
Entity”. A review of these condensed consolidated financial statements consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is
substantially less in scope than an audit conducted in accordance with International Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an
audit. Accordingly, we do not express an audit opinion.
CONCLUSION
Based on our review, nothing has come to our attention that causes us to believe that the condensed consolidated financial
statements are not prepared, in all material respects, in accordance with IAS 34.
Deloitte Touche Tohmatsu
Certified Public Accountants
Hong Kong August 14, 2015
27
INCOME STATEMENT
Six months ended June 30,
2015 2014
US$’000, except per share data
Note(Unaudited)
Net revenues 5 3,516,594 5,075,255
Gaming
tax(1,382,490)(2,169,447)
Employee benefit expenses(568,459)(529,555)
Depreciation and amortization(268,457)(257,250)
Gaming promoter/agency commissions(81,948)(183,949)
Inventories consumed(40,196)(49,932)
Other expenses and losses 6(429,488)(465,309)
Operating profit 745,556 1,419,813
Interest income 8,736 9,489
Interest expense, net
of amounts capitalized 7(30,459)(38,193)
Loss on modification or early retirement of debt 15 —(17,964)
Profit before income tax 723,833 1,373,145
Income tax benefit/(expense) 8 10,660(2,729)
Profit for the period attributable to equity holders
of the Company 734,493 1,370,416
Earnings per
share for profit attributable to
equity holders of the Company
— Basic 9 US9.10 cents US16.99 cents
— Diluted 9 US9.10 cents US16.98 cents
The
notes on pages 34 to 56 form an integral part of these condensed consolidated financial statements.
28
SANDS
CHINA LTD. Interim Report 2015
4.2 CONSOLIDATED
STATEMENT OF COMPREHENSIVE INCOME
Six months ended June 30,
2015 2014
US$’000
(Unaudited)
Profit for the period attributable to
equity holders of the Company 734,493 1,370,416
Other comprehensive income, net of tax
Item that will not be reclassified subsequently to profit or loss:
Currency translation differences 3,352 3,823
Total comprehensive income for the period attributable to
equity holders of the Company 737,845 1,374,239
The notes on pages 34 to 56 form an integral part of these condensed consolidated financial statements.
29
BALANCE SHEET
June 30, December 31,
2015 2014
US$’000
Note(Unaudited)(Audited)
ASSETS
Non-current assets
Investment properties, net 1,200,042 1,143,222
Property and equipment, net 11 7,204,694 6,912,974
Intangible assets, net 23,117 20,705
Deferred income tax assets 37,700 23,910
Other
assets, net 29,529 30,506
Trade and other receivables and prepayments, net 23,946 21,328
Total non-current assets 8,519,028 8,152,645
Current assets
Inventories 11,976 13,913
Trade and other receivables and prepayments, net 12 534,036 639,180
Restricted cash and cash equivalents 7,120 6,538
Cash and cash equivalents 1,955,421 2,535,315
Total current assets 2,508,553 3,194,946
Total assets 11,027,581 11,347,591
The notes on
pages 34 to 56 form an integral part of these condensed consolidated financial statements.
30
SANDS
CHINA LTD. Interim Report 2015
June 30, December 31,
2015 2014
US$’000
Note(Unaudited)(Audited)
EQUITY
Capital and reserves attributable to equity holders
of the Company
Share capital 13 80,689 80,677
Reserves 5,025,669
6,348,670
Total equity 5,106,358 6,429,347
LIABILITIES
Non-current liabilities
Trade and other payables
14 80,330 77,566
Borrowings 15 3,368,866 3,194,369
Deferred income tax liabilities 26,807 26,504
Total non-current liabilities 3,476,003 3,298,439
Current liabilities
Trade and other payables 14 1,395,361 1,608,344
Dividend payable 10 1,041,180 —
Current income tax liabilities 2,910 5,644
Borrowings 15 5,769 5,817
Total current liabilities 2,445,220 1,619,805
Total liabilities 5,921,223 4,918,244
Total equity and liabilities 11,027,581 11,347,591
Net current assets 63,333 1,575,141
Total assets less current liabilities 8,582,361 9,727,786
Approved by the Board of Directors on August 14, 2015 and signed on behalf of the Board by
Sheldon Gary Adelson Toh Hup Hock
Director
Director
The notes on pages 34 to 56 form an integral part of these condensed consolidated financial
statements.
31
4.2
CONSOLIDATED
STATEMENT OF CHANGES IN EQUITY
Share-based Currency
Share Capital Share Statutory compensation translation Retained
capital reserve premium reserve reserves reserve earnings Total
US$’000
(Unaudited)
For the six months ended
June 30, 2014
Balance at January 1,
2014 80,632 87,435 2,180,495 6,317 52,731 7,804 4,034,468 6,449,882
Profit for the period — — —
— — — 1,370,416 1,370,416
Other comprehensive income
for the period, net of tax — — — — — 3,823 — 3,823
Total comprehensive income — — — — — 3,823 1,370,416 1,374,239
Exercise of share options 27 — 6,636 — — — — 6,663
Transfer to share premium upon
exercise of share options — — 3,866 —(3,866) — — —
Share-based compensation
of the Company —
— — — 11,635 — — 11,635
Share-based compensation
charged by LVS — — — — 390 — — 390
Dividends to equity holders
of the Company (Note 10) — —(800,563) — — —(1,800,000)(2,600,563)
Balance at June 30, 2014 80,659 87,435 1,390,434 6,317 60,890 11,627 3,604,884 5,242,246
For the six months ended
June 30, 2015
Balance at January 1, 2015 80,677 87,435 1,397,002 6,317 71,062 4,682 4,782,172 6,429,347
Profit for the period — — — — — — 734,493 734,493
Other comprehensive income
for the period, net of tax — — — — — 3,352 — 3,352
Total comprehensive income — — — — — 3,352 734,493 737,845
Exercise of share options 12 — 2,499 — — — — 2,511
Reclassification of certain
share-based
compensation
awards from equity-settled
to cash-settled — — — —(5,472) — —(5,472)
Transfer to share premium upon
exercise of share options — — 1,662 —(1,662) — — —
Share-based compensation
of the Company —
— — — 13,642 — — 13,642
Share-based compensation
charged by LVS — — — — 141 — — 141
Dividends to equity holders
of the Company (Note 10) — — — — — —(2,071,656)(2,071,656)
Balance at June 30, 2015 80,689 87,435 1,401,163 6,317 77,711 8,034 3,445,009 5,106,358
The notes on pages 34 to 56 form an integral part of these condensed consolidated financial statements.
32
SANDS
CHINA LTD. Interim Report 2015
4.2 CONSOLIDATED
CONSOLIDATED STATEMENT OF CASH FLOWS
Six months ended June 30,
2015 2014
US$’000
(Unaudited)
Net cash generated from operating
activities 901,172 1,670,976
Cash flows from investing activities
Increase in restricted cash and cash equivalents (576) (588))
Purchases of property and equipment (520,933) (389,530)
Additions to investment properties (72,930) (33,930)
Purchases of intangible assets (5,755) (4,529)
Proceeds from disposal of property and equipment 33 67
Interest received 11,199 10,158
Net cash used in
investing activities (588,962) (418,352)
Cash flows from financing activities
Proceeds from exercise of share options 2,511 6,663
Proceeds from borrowings 999,277 819,725
Repayments of borrowings (520,188) (819,679)
Dividends paid (1,030,161) (2,600,916)
Repayments of finance lease liabilities (4,350) (4,864)
Payments for deferred financing costs (11,664) (61,751)
Interest paid (28,699) (29,338)
Net cash used in
financing activities (893,274) (2,690,160)
Net decrease in cash and cash equivalents (581,064) (1,437,536)
Cash and cash equivalents at beginning of period 2,535,315 2,943,424
Effect of exchange rate on cash and cash equivalents 1,170 1,897
Cash and cash equivalents at end of period 1,955,421 1,507,785
Cash and cash equivalents comprised:
Cash at bank and on hand 495,170 581,542
Short-term bank deposits 1,460,251 926,243
1,955,421 1,507,785
The notes on pages 34 to 56
form an integral part of these condensed consolidated financial statements.
33
4.3 NOTES
TO THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
1. GENERAL INFORMATION Principal activities
Sands China Ltd. (the “Company”) and its subsidiaries (collectively referred to as the “Group”) are principally engaged in the operation of casino games of chance or
games of other forms and the development and operation of integrated resorts and other ancillary services in the Macao Special Administrative Region of the People’s Republic of China (“Macao”). The Group’s immediate holding
company is Venetian Venture Development Intermediate II (“VVDI (II)”). Las Vegas Sands Corp. (“LVS”) is the Group’s ultimate holding company.
The Company was incorporated in the Cayman Islands on July 15, 2009 as an exempted company with limited liability under the Companies Law, Cap 22 (Law 3 of 1961, as consolidated and
revised) of the Cayman Islands. The address of the Company’s registered office is Intertrust Corporate Services (Cayman) Limited, 190 Elgin Avenue, George Town, Grand Cayman KY1-9005, Cayman Islands. The Company’s principal place of
business in Hong Kong is Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong.
The Group owns and
operates The Venetian Macao-Resort-Hotel (“The Venetian Macao”), which anchors the Cotai Strip, the Group’s master-planned development of integrated resort properties in Macao. Sands Cotai Central opened in phases, beginning in April
2012. The property currently features three hotel towers, consisting of hotel rooms and suites under the Conrad, Holiday Inn and Sheraton brands. The Group owns The Plaza Macao, which is located adjacent and connected to The Venetian Macao. The
Plaza Macao is an integrated resort that includes the Four Seasons Hotel Macao, the Plaza Casino, Shoppes at Four Seasons and Paiza Mansions. The Plaza Macao will also feature an apart-hotel tower consisting of Four Seasons-serviced and -branded
luxury apart-hotel units and common areas. The Group also owns and operates the Sands Macao, the first Las Vegas-style casino in Macao. The Group’s other ancillary services include ferry operations and other related operations.
The Company’s shares were listed on the Main Board of The Stock Exchange of Hong Kong Limited on November 30,
2009.
The unaudited condensed consolidated financial statements are presented in United States dollars
(“US$”), unless otherwise stated. The condensed consolidated financial statements were approved and authorized for issue by the Board of Directors of the Company on August 14, 2015.
These condensed consolidated financial statements have not been audited.
2. BASIS OF PREPARATION
The condensed consolidated financial statements for the six months ended June 30, 2015 have been prepared in accordance with International Accounting Standard (“IAS”) 34
“Interim Financial Reporting” issued by the International Accounting Standards Board (“IASB”) and the applicable disclosure requirements of Appendix 16 to the Listing Rules. They should be read in conjunction with the
Group’s annual financial statements for the year ended December 31, 2014, which were prepared in accordance with International Financial Reporting Standards (“IFRS”).
34
SANDS
CHINA LTD. Interim Report 2015
3. SIGNIFICANT ACCOUNTING POLICIES
The condensed consolidated financial statements have been prepared on the historical cost basis except for certain
financial assets and financial liabilities that are measured at fair value.
Except as described below, the
accounting policies adopted and methods of computation used in the preparation of the condensed consolidated financial statements for the six months ended June 30, 2015 are consistent with those adopted and as described in the Group’s
annual financial statements for the year ended December 31, 2014.
During the period, there have been a
number of new amendments to standards that have come into effect, which the Group has adopted at their respective effective dates. The adoption of these new amendments to standards had no material impact on the results of operations and financial
position of the Group.
The Group has not early adopted the new or revised standards and amendments that have
been issued, but are not yet effective for the period. The Group has already commenced the assessment of the impact of the new or revised standards and amendments to the Group, but is not yet in a position to state whether their adoption would have
a significant impact on the results of operations and financial position of the Group.
The preparation of
condensed consolidated financial statements requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may
differ from these estimates. In preparing these condensed consolidated financial statements, the significant judgments made by management in the process of applying the Group’s accounting policies and the key sources of estimation uncertainty
were the same as those that were applied to the consolidated financial statements for the year ended December 31, 2014.
The Group’s activities expose it to a variety of financial risks: market risk, credit risk and liquidity risk. The condensed consolidated financial statements do not include all
financial risk management information and disclosures required in the annual financial statements and should be read in conjunction with the Group’s annual financial statements for the year ended December 31, 2014. There have been no
changes in any risk management policies since year-end 2014.
4. SEGMENT INFORMATION
Management has determined the operating segments based on the reports reviewed by a group of senior management to make
strategic decisions. The Group considers the business from a property and service perspective.
The
Group’s principal operating and developmental activities occur in Macao, which is the sole geographic area in which the Group is domiciled. The Group reviews the results of operations for each of its key operating segments, which are also the
reportable segments: The Venetian Macao, Sands Cotai Central, The Plaza Macao, Sands Macao and ferry and other operations. The Group’s primary projects under development are The Parisian Macao, the St. Regis tower (the remaining phase of Sands
Cotai Central) and the Four Seasons apart-hotel tower.
35
4.3 NOTES
TO THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
4. SEGMENT INFORMATION (CONTINUED)
Revenue comprises turnover from the sale of goods and services in the ordinary course of the Group’s activities. The Venetian Macao, Sands Cotai Central, The Plaza Macao, Sands Macao,
and The Parisian Macao once in operation, derive their revenue primarily from casino, mall, hotel, food and beverage, convention, retail and other sources. Ferry and other operations mainly derive their revenue from the sale of ferry tickets for
transportation between Hong Kong and Macao.
The Group’s segment information is as follows:
Six months ended June 30,
2015 2014
US$’000
(Unaudited)
Net revenues
The Venetian Macao 1,521,865
2,208,157
Sands Cotai Central 1,114,730 1,598,818
The Plaza Macao 364,226 596,369
Sands Macao 461,305 619,913
Ferry and other
operations 68,980 66,026
The Parisian Macao — —
Inter-segment revenues (14,512) (14,028)
3,516,594 5,075,255
Six months ended
June 30,
2015 2014
US$’000
(Unaudited)
Adjusted EBITDA (Note)
The Venetian Macao 526,477 872,850
Sands Cotai
Central 319,628 513,026
The Plaza Macao 118,828 180,844
Sands Macao 123,247 172,984
Ferry and other operations 7,982 (2,354)
The
Parisian Macao — —
1,096,162 1,737,350
Note: Adjusted EBITDA is profit attributable to equity holders of the Company before share-based compensation, corporate
expense, pre-opening expense, depreciation and amortization, net foreign exchange gains/(losses), gain/(loss) on disposal of property and equipment, investment properties and intangible assets, fair value losses on financial assets at fair value
through profit or loss, interest, loss on modification or early retirement of debt and income tax benefit/(expense). Adjusted EBITDA is used by management as the primary measure of operating performance of the Group’s properties and to compare
the operating performance of the Group’s properties with that of its competitors. However, adjusted EBITDA should not be considered in isolation; construed as an alternative to profit or operating profit; as an indicator of the Group’s
IFRS operating performance, other combined operations or cash flow data; or as an alternative to cash flow as a measure of liquidity. Adjusted EBITDA as presented by the Group may not be directly comparable to other similarly titled measures
presented by other companies.
36
SANDS
CHINA LTD. Interim Report 2015
| 4. |
|
SEGMENT INFORMATION (CONTINUED) |
Six months ended June 30,
2015 2014
US$’000
(Unaudited)
Depreciation and amortization
The Venetian Macao
78,921 75,027
Sands Cotai Central 143,942 137,572
The Plaza Macao 19,986 20,383
Sands Macao 18,769 17,339
Ferry and other
operations 6,839 6,929
The Parisian Macao — —
268,457 257,250
The following is a reconciliation of adjusted EBITDA to profit for the period attributable to equity holders of the Company:
Six months ended June 30,
2015 2014
US$’000
(Unaudited)
Adjusted EBITDA 1,096,162 1,737,350
Share-based
compensation, net of amount capitalized(i)(12,303)(10,754)
Corporate expense(36,893)(29,292)
Pre-opening expense(18,551)(20,077)
Depreciation and amortization(268,457)(257,250)
Net foreign exchange gains 1,142 1,237
Loss on disposal of property and equipment, investment properties
and intangible assets(15,544)(1,386)
Fair value
losses on financial assets at fair value through profit or loss —(15)
Operating profit 745,556 1,419,813
Interest income 8,736 9,489
Interest expense, net of amounts capitalized(30,459)(38,193)
Loss on modification or early retirement of debt —(17,964)
Profit before income tax 723,833 1,373,145
Income
tax benefit/(expense) 10,660(2,729)
Profit for the period attributable to equity holders of the Company
734,493 1,370,416
(i) Amount includes share-based compensation of US$1,054,000 and US$749,000 (six months
ended June 30, 2014: nil and US$214,000) related to corporate expense and pre-opening expense, respectively.
37
4.3 NOTES
TO THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
| 4. |
|
SEGMENT INFORMATION (CONTINUED) |
Six months ended June 30,
2015 2014
US$’000
(Unaudited)
Capital expenditures
The Venetian Macao 43,387
44,150
Sands Cotai Central 219,090 156,546
The Plaza Macao 8,179 21,850
Sands Macao 13,542 14,788
Ferry and other
operations 1,385 1,092
The Parisian Macao 314,035 189,563
599,618 427,989
June 30, December 31,
2015 2014
US$’000
(Unaudited) (Audited)
Total assets
The Venetian Macao 3,325,443 3,854,834
Sands Cotai Central 4,758,198 4,830,193
The Plaza
Macao 1,113,909 1,181,298
Sands Macao 396,632 416,562
Ferry and other operations 247,972 229,253
The Parisian Macao 1,185,427 835,451
11,027,581
11,347,591
June 30, December 31,
2015 2014
US$’000
(Unaudited)(Audited)
Total non-current assets
Held locally 8,314,696 7,956,622
Held in foreign
countries 166,632 172,113
Deferred income tax assets 37,700 23,910
8,519,028 8,152,645
38
SANDS
CHINA LTD. Interim Report 2015
Six months ended June 30,
2015 2014
US$’000
(Unaudited)
Casino 2,998,667 4,571,491
Mall
— Income from right of use 155,789 126,057
— Management fees and other 25,558 21,812
Rooms 154,036 164,911
Food and beverage 74,271
84,061
Convention, ferry, retail and other 108,273 106,923
3,516,594 5,075,255
| 6. |
|
OTHER EXPENSES AND LOSSES |
Six months ended June 30,
2015 2014
US$’000
(Unaudited)
Utilities and operating supplies 86,522 107,519
Advertising and promotions 67,867 78,875
Contract labor and services 58,657 59,630
Repairs
and maintenance 30,475 30,957
Royalty fees 30,061 26,985
Provision for doubtful accounts 29,649 24,491
Management fees 22,076 26,888
Loss on disposal of
property and equipment, investment properties
and intangible assets 15,544 1,386
Operating lease payments 13,790 14,304
Auditor’s remuneration 991 884
Net foreign
exchange gains(1,142)(1,237)
Suspension costs(1) — 7,545
Fair value losses on financial assets at fair value through profit or loss — 15
Other support services 58,725 63,363
Other operating expenses 16,273 23,704
429,488
465,309
(1) Suspension costs were primarily comprised of fees paid to trade contractors and legal costs as a
result of the temporary project suspension at The Parisian Macao, which resumed construction activities in October 2014.
39
4.3 NOTES
TO THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
7. INTEREST EXPENSE, NET OF AMOUNTS CAPITALIZED
Six months ended June 30,
2015 2014
US$’000
(Unaudited)
Bank borrowings 23,311 25,220
Amortization of deferred financing costs 9,961 10,874
Finance lease liabilities 2,900 3,072
Standby fee and other financing costs 4,364 2,718
40,536 41,884
Less: interest capitalized(10,077)(3,691)
Interest expense, net of amounts capitalized 30,459 38,193
| 8. |
|
INCOME TAX BENEFIT/(EXPENSE) |
Six months ended June 30,
2015 2014
US$’000
(Unaudited)
Current income tax
Lump sum in lieu of Macao
complementary tax on dividends(2,655)(2,653)
Other overseas taxes(339)(74)
Over/(under)provision in prior years
Macao complementary tax —(2)
Other overseas
taxes 166 132
Deferred income tax 13,488(132)
Income tax benefit/(expense) 10,660(2,729)
The Company’s subsidiaries that carry on business in Hong Kong are subject to Hong Kong profits tax at 16.5% for the
six months ended June 30, 2015 (six months ended June 30, 2014: same). Taxation for overseas jurisdictions is
charged
at the appropriate prevailing rates ruling in the respective jurisdictions. The maximum rate is 12%
for Macao (six months
ended June 30, 2014: same) and 25% for China (six months ended June 30, 2014:
same).
40
SANDS
CHINA LTD. Interim Report 2015
8. INCOME TAX BENEFIT/(EXPENSE) (CONTINUED)
Pursuant to the Despatch No. 250/2004 issued by the Chief Executive of Macao on September 30, 2004, Venetian
Macau Limited (“VML”) was exempt from Macao complementary tax on its gaming activities for five years effective from the tax year 2004 to the tax year 2008. On May 21, 2008, VML was granted, pursuant to the Despatch No. 167/2008
issued by the Chief Executive of Macao, an extension of the tax exemption regarding Macao complementary tax on its gaming activities for an additional five years, effective from the tax year 2009 to the tax year 2013. On October 3, 2013, VML
was granted, pursuant to the Despatch No. 320/2013 issued by the Chief Executive of Macao, an extension of the tax exemption regarding Macao complementary tax on its gaming activities for an additional five years, effective from the tax year
2014 to the tax year 2018. Regarding the other subsidiaries, during the six months ended June 30, 2015, Macao complementary tax is calculated progressively up to a maximum of 12% of the estimated assessable profit (six months ended
June 30, 2014: same).
VML entered into a Shareholder Dividend Tax Agreement with the Macao Government in
2011. The agreement provided for an annual payment in lieu of Macao complementary tax otherwise due by VML’s shareholders on dividend distributions to them from gaming profits, effective through the end of 2013. In May 2014, VML entered into
another Shareholder Dividend Tax Agreement with the Macao Government for an extension of the agreement through 2018 to correspond to the Macao complementary tax exemption on its gaming activities.
9. EARNINGS PER SHARE
Basic earnings per share is calculated by dividing the profit for the period attributable to equity holders of the Company by the weighted average number of ordinary shares outstanding
during the period.
Diluted earnings per share is calculated by adjusting the weighted average number of
ordinary shares outstanding to assume conversion of all dilutive potential ordinary shares. For the six months ended June 30, 2015, the Company had outstanding share options and restricted share units that will potentially dilute the ordinary
shares.
41
4.3 NOTES
TO THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
9. EARNINGS PER SHARE (CONTINUED)
The calculation of basic and diluted earnings per share is based on the following:
Six months ended June 30,
2015 2014
(Unaudited)
Profit attributable to equity holders of the Company (US$’000) 734,493 1,370,416
Weighted average number of shares for basic earnings per share
(thousand shares) 8,068,344 8,064,183
Adjustments
for share options and restricted share units
(thousand shares) 2,574 8,462
Weighted average number of shares for diluted earnings per share
(thousand shares) 8,070,918 8,072,645
Earnings per share, basic US9.10 cents US16.99 cents
Earnings per share, basic(i) HK70.55 cents HK131.69 cents
Earnings per share, diluted US9.10 cents US16.98 cents
Earnings per share, diluted(i) HK70.55 cents HK131.62 cents
(i) The translation of US$ amounts into HK$ amounts has been made at the rate of US$1.00 to HK$7.7523 (six months ended June 30, 2014: US$1.00 to HK$7.7513). No representation is made
that the HK$ amounts have been, could have been or could be converted into US$, or vice versa, at that rate, at any other rates or at all.
42
SANDS
CHINA LTD. Interim Report 2015
Six months ended June 30,
2015 2014
US$’000
(Unaudited)
2014 interim dividend of HK$0.99
(equivalent to US$0.128)
per ordinary share declared on January 23, 2015 and paid 1,030,396 —
2014 final dividend of HK$1.00 (equivalent to US$0.129)
per ordinary share declared on June 17, 2015 1,041,260 —
2013 interim dividend of HK$0.87 (equivalent to US$0.112)
per ordinary share declared on January 24, 2014 and paid — 905,118
2013 special dividend of HK$0.77 (equivalent to US$0.099)
per ordinary share declared on January 24, 2014 and paid — 801,082
2013 final dividend of HK$0.86 (equivalent to US$0.111)
per ordinary share declared on May 30, 2014 and paid — 894,363
2,071,656 2,600,563
On January 23, 2015, the Board declared an interim dividend of HK$0.99 (equivalent to US$0.128) per share. This interim dividend, amounting in aggregate to HK$7.99 billion (equivalent
to US$1.03 billion), was paid on February 27, 2015.
On June 17, 2015, the Shareholders approved a
final dividend of HK$1.00 (equivalent to US$0.129) per share for the year ended December 31, 2014 to Shareholders whose names appeared on the register of members of the Company on June 24, 2015. The final dividend, amounting in aggregate
to HK$8.07 billion (equivalent to US$1.04 billion), was paid on July 15, 2015.
The Board does not
recommend the payment of an interim dividend for the six months ended June 30, 2015.
| 11. |
|
PROPERTY AND EQUIPMENT, NET |
June 30, December 31,
2015 2014
US$’000
(Unaudited)(Audited)
Balance, beginning of period/year 6,912,974 6,722,586
Additions 550,388 755,839
Adjustments to project
costs (1,820) (20,436)
Disposals(15,599)(3,305)
Transfer to investment properties —(57,376)
Depreciation (246,087) (481,722)
Exchange
difference 4,838 (2,612)
Balance, end of period/year 7,204,694 6,912,974
43
4.3 NOTES
TO THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
The aging analysis of trade receivables, net of provision for doubtful accounts, is as follows:
June 30, December 31,
2015 2014
US$’000
(Unaudited)(Audited)
0–30 days 390,767
515,852
31–60 days 32,306 35,199
61–90 days 10,125 10,651
Over 90 days 21,205
15,935
454,403 577,637
Trade receivables mainly consist of casino receivables. The Group extends credit to approved casino customers following background checks and investigations of creditworthiness. Credit is
granted to certain gaming promoters on a revolving basis. All gaming promoter credit lines are generally subject to monthly review and regular settlement procedures to evaluate the current status of liquidity and financial health of these gaming
promoters. Credit is granted based on the performance and financial background of the gaming promoter and, if applicable, the gaming promoter’s guarantor. The receivables from gaming promoters can be offset against the commissions payable and
front money deposits made by the gaming promoters. Absent special approval, the credit period granted to selected premium and mass market players is typically 7–15 days, while for gaming promoters, the receivable is typically repayable within
one month following the granting of the credit subject to terms of the relevant credit agreement. The Group generally does not charge interest for credit granted, but requires a personal check or other acceptable forms of security.
As at June 30, 2015, included in trade receivables after provision for doubtful accounts are casino receivables of
US$408.2 million (as at December 31, 2014: US$456.7 million). There is a concentration of credit risk related to net casino receivables as 63.2% (as at December 31, 2014: 55.9%) of the casino receivables as at June 30, 2015 were from
the top five customers. Other than casino receivables, there is no other concentration of credit risk with respect to trade receivables as the Group has a large number of customers. The Group believes that the concentration of its credit risk in
casino receivables is mitigated substantially by its credit evaluation process, credit policies, credit control and collection procedures, and also believes that no significant credit risk is inherent in the Group’s trade receivables not
provided for as at June 30, 2015 and December 31, 2014.
The Group maintains an allowance for
doubtful casino, mall and hotel accounts and regularly evaluates the balances. The Group specifically analyzes the collectability of each account with a balance over a specified dollar amount, based upon the age of the account, the customer’s
financial condition, collection history and any other known information, and the Group makes an allowance for trade receivables specifically identified as doubtful. The Group also monitors regional and global economic conditions and forecasts in its
evaluation of the adequacy of the recorded allowances.
44
SANDS
CHINA LTD. Interim Report 2015
Ordinary shares
of US$0.01 each US$’000
Issued and fully paid:
At January 1, 2014 (audited) 8,063,193,845 80,632
Shares issued upon exercise of share options 2,659,500 27
At June 30, 2014 (unaudited) 8,065,853,345 80,659
At January 1, 2015 (audited) 8,067,701,545 80,677
Shares issued upon exercise of share options 1,219,200 12
At June 30, 2015 (unaudited) 8,068,920,745 80,689
| 14. |
|
TRADE AND OTHER PAYABLES |
June 30, December 31,
2015 2014
US$’000
Note (Unaudited) (Audited)
Trade payables 28,066 35,771
Outstanding chips
and other casino liabilities 466,991 606,592
Deposits 250,385 290,231
Construction payables and accruals 218,164 196,930
Other tax payables 212,990 250,935
Accrued employee benefit expenses 129,345 134,546
Interest payables 39,356 37,601
Payables to related companies — non-trade 17(b) 11,915 4,383
Other payables and accruals 118,479 128,921
1,475,691 1,685,910
Less: non-current portion (80,330) (77,566)
Current portion 1,395,361 1,608,344
45
4.3 NOTES
TO THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
| 14. |
|
TRADE AND OTHER PAYABLES (CONTINUED) |
The aging analysis of trade payables is as follows:
June 30, December 31,
2015 2014
US$’000
(Unaudited)(Audited)
0–30 days 20,276 22,556
31–60 days
4,327 9,214
61–90 days 1,262 2,070
Over 90 days 2,201 1,931
28,066 35,771
June 30, December 31,
2015 2014
US$’000
(Unaudited)(Audited)
Non-current portion
Bank loans, secured 3,389,093 3,208,268
Finance lease liabilities on leasehold interests in land, secured 72,010 75,500
Other finance lease liabilities, secured 2,367 3,422
3,463,470 3,287,190
Less: deferred financing costs(94,604)(92,821)
3,368,866 3,194,369
Current portion
Finance lease liabilities on
leasehold interests in land, secured 3,485 3,545
Other finance lease liabilities, secured 2,284 2,272
5,769 5,817
Total borrowings 3,374,635 3,200,186
46
SANDS
CHINA LTD. Interim Report 2015
| 15. |
|
BORROWINGS (CONTINUED) |
The Group’s borrowings are denominated in the following currencies:
June 30, December 31,
2015 2014
US$’000
(Unaudited)(Audited)
US$ 1,287,931 1,351,187
HK$ 1,531,199 1,241,871
MOP 555,505 607,128
3,374,635 3,200,186
The estimated fair value of
the Group’s bank loans as at June 30, 2015 was approximately US$3.27 billion (as at
December 31, 2014: US$3.09 billion). The maturities of bank loans are as follows:
June 30, December 31,
2015 2014
US$’000
(Unaudited)(Audited)
Repayable between 1 and 2 years 59,732 —
Repayable between 2 and 5 years 2,749,475 1,576,241
Repayable after 5 years 579,886 1,632,027
3,389,093 3,208,268
The movements of bank loans
are analyzed as follows:
June 30, December 31,
2015 2014
US$’000
(Unaudited)(Audited)
Balance, beginning of period/year 3,208,268 3,208,869
Proceeds from borrowings 999,277 819,725
Repayments of borrowings(820,188)(819,679)
Exchange difference 1,736(647)
Balance, end of period/year 3,389,093 3,208,268
47
4.3 NOTES
TO THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
| 15. |
|
BORROWINGS (CONTINUED) 2011 VML Credit Facility |
During March 2014, the Group amended its 2011 VML Credit Facility to, among other things, modify certain financial
covenants. In addition to the amendment, certain lenders extended the maturity of US$2.39 billion in aggregate principal amount of the 2011 VML Term Facility to March 31, 2020 (the “Extended 2011 VML Term Facility”), and, together
with new lenders, provided US$2.0 billion in aggregate principal amount of revolving loan commitments (the “Extended 2011 VML Revolving Facility”). A portion of the revolving proceeds was used to pay down the US$819.7 million in aggregate
principal balance of the 2011 VML Term Facility loans that were not extended. The Group recorded an US$18.0 million loss on modification or early retirement of debt during the six months ended June 30, 2014, in connection with the pay down and
extension.
In April 2015, the Group entered into a joinder agreement (the “Joinder Agreement”) to
the 2011 VML Credit Facility. Under the Joinder Agreement, certain lenders have agreed to provide a new term loan equal to US$1.0 billion (the “2011 VML Accordion Term”), which was fully funded on April 30, 2015 (the “Joinder
Funding Date”). During the six months ended June 30, 2015, the Group made repayments of US$820.2 million on the Extended 2011 VML Revolving Facility.
The 2011 VML Accordion Term bears interest, at the Group’s option, at either the adjusted Eurodollar rate or Hong Kong Inter-bank Offered Rate (“HIBOR”), plus a credit
spread, or an alternative base rate, plus a credit spread, which credit spread in each case is determined based on the consolidated total leverage ratio as set forth in the Joinder Agreement. The credit spread ranges from 0.25% to 1.125% per
annum for loans accruing interest at the base rate and from 1.25% to 2.125% per annum for loans accruing interest at an adjusted Eurodollar or HIBOR rate. The initial credit spread as at April 30, 2015 (the date the term was funded), was
0.25% per annum for loans accruing interest at a base rate and 1.25% per annum for loans accruing at an adjusted Eurodollar or HIBOR rate.
The 2011 VML Accordion Term will mature on March 30, 2021. Commencing with the quarterly period ending June 30, 2018, and at the end of each subsequent quarter through
March 31, 2019, the Joinder Agreement requires the Borrower to repay the outstanding 2011 VML Accordion Term on a pro rata basis in an amount equal to 2.5% of the aggregate principal amount outstanding as at the Joinder Funding Date. Commencing
with the quarterly period ending on June 30, 2019, and at the end of each subsequent quarter through March 31, 2020, the Borrower is required to repay the outstanding 2011 VML Accordion Term on a pro rata basis in an amount equal to 5.0%
of the aggregate principal amount outstanding as at the Joinder Funding Date. For the quarterly periods ending on June 30 through December 31, 2020, the Borrower is required to repay the outstanding 2011 VML Accordion Term on a pro rata
basis in an amount equal to 12.0% of the aggregate principal amount outstanding as at the Joinder Funding Date. The remaining balance on the 2011 VML Accordion Term is due on the maturity date.
As at June 30, 2015, the Group had US$2.0 billion of available borrowing capacity under the Extended 2011 VML
Revolving Facility.
48
SANDS
CHINA LTD. Interim Report 2015
| 15. |
|
BORROWINGS (CONTINUED) |
The movements of finance lease liabilities on leasehold interests in land are analyzed as follows:
June 30, December 31,
2015 2014
US$’000
(Unaudited)(Audited)
Balance, beginning of period/year 79,045 82,186
True-up adjustment(1,318)(730)
Additions 1,060 —
Repayments(3,292)(2,411)
Balance, end of period/year 75,495 79,045
| 16. |
|
COMMITMENTS AND CONTINGENCIES |
Property and equipment commitments not provided for are as follows:
June 30, December 31,
2015 2014
US$’000
(Unaudited)(Audited)
Contracted but not provided
for 1,397,421 1,884,478
Authorized but not contracted for 1,019,442 1,161,299
2,416,863 3,045,777
| (b) |
|
Operating lease commitments |
| (i) |
|
The Group as the lessee |
The Group had future aggregate minimum lease payments under non-cancelable operating leases for
property and equipment as follows:
June 30, December 31,
2015 2014
US$’000
(Unaudited) (Audited)
No later than 1 year 3,363
3,726
Later than 1 year and no later than 5 years 9 36
3,372 3,762
49
4.3 NOTES
TO THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
| 16. |
|
COMMITMENTS AND CONTINGENCIES (CONTINUED) (b) Operating lease commitments (continued)
|
(ii) The Group as the lessor/grantor of the right of use
The future aggregate minimum lease/base fee receivables under non-cancelable agreements are as follows:
June 30, December 31,
2015 2014
US$’000
(Unaudited) (Audited)
No later than 1 year 291,981 282,183
Later than 1
year and no later than 5 years 712,439 712,372
Later than 5 years 260,218 269,385
1,264,638 1,263,940
The Group has contingent liabilities arising in the ordinary course of business. Management has made estimates for potential litigation costs based upon consultation with legal counsel.
Actual results could differ from these estimates; however, in the opinion of management, such litigation and claims will not have a material adverse effect on the Group’s financial condition, results of operations or cash flows.
| (d) |
|
Cotai Strip development projects |
Under the land concession for The Parisian Macao, which is anticipated to open in the second half of 2016 (subject to
Macao Government approval), the Group is required to complete the development by April 2016. The land concession for Sands Cotai Central contains a similar requirement that the development be completed by December 2016. The Group has applied for an
extension from the Macao Government to complete The Parisian Macao as the Group believes it will be unable to meet the April 2016 deadline. Should the Group determine that it is unable to complete Sands Cotai Central by December 2016, the Group
would then also expect to apply for another extension from the Macao Government. If the Group is unable to meet the Sands Cotai Central deadline and the deadlines for either development are not extended, the Group could lose its land concessions for
The Parisian Macao or Sands Cotai Central, which would prohibit the Group from operating any facilities developed under the respective land concessions. As a result, the Group could record a charge for all or some portion of the US$1.18 billion or
US$4.78 billion in capitalized construction costs including land, as at June 30, 2015, related to The Parisian Macao and Sands Cotai Central, respectively.
50
SANDS
CHINA LTD. Interim Report 2015
| 17. |
|
RELATED PARTY TRANSACTIONS |
For the purposes of the condensed consolidated financial statements, parties are considered to be related to the Group if
the party has the ability, directly or indirectly, to exercise significant influence over the Group in making financial and operating decisions, or vice versa. Related parties may be individuals (being members of key management personnel, signi cant
Shareholders and/or their close family members) or other entities, and include entities which are under the significant influence of related parties of the Group where those parties are individuals. Related companies represent the group companies of
the LVS group.
Save as disclosed elsewhere in the condensed consolidated financial statements, the Group had
the following significant transactions with related parties during the period:
| (a) |
|
Transactions during the period |
| (i) |
|
Management fee income |
Six months ended June 30, 2015 2014 US$’000
(Unaudited)
LVS 762 471 Intermediate holding companies 187 238 Fellow subsidiaries 1,638 1,088
2,587 1,797
Management services are provided by
the Group to LVS group companies. These services include, but are not limited to, accounting services, information technology support, sourcing of goods and services, and design, development and construction consultancy services. Management fees are
charged at actual cost incurred or on a cost-plus basis, allowing a margin of 5%.
(ii) Management fee expense
Six months ended June 30,
2015 2014
US$’000
(Unaudited)
LVS 7,281 9,458
Intermediate holding company 95
12
Fellow subsidiaries 6,880 7,725
14,256 17,195
Management services are provided by
LVS group companies. These services include, but are not limited to, human resources support, accounting services, sourcing of goods and services, sourcing of tenants for the malls, other various types of marketing and promotion activities for the
Group, and design, development and construction consultancy services. Management fees are charged at actual cost incurred or on a cost-plus basis, allowing a margin of 5%.
51
4.3 NOTES
TO THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
| 17. |
|
RELATED PARTY TRANSACTIONS (CONTINUED) (a) Transactions during the period (continued)
|
(iii) Key management personnel remuneration
No transactions have been entered into with the Directors of the Company (being the key management personnel) during the
six months ended June 30, 2015 other than the emoluments paid or payable to them totaling US$5.0 million (six months ended June 30, 2014: US$4.1 million).
In addition, two directors of the Company received emoluments (inclusive of share-based compensation) from LVS of US$1.5 million (six months ended June 30, 2014: US$0.4 million) for
their services to the Group for the six months ended June 30, 2015.
(iv) Royalty fees
There has been no change in the terms of the royalty agreement that was entered into with Las Vegas Sands, LLC in November
2009 since the last annual report. During the six months ended June 30, 2015, the Group incurred US$27.3 million (six months ended June 30, 2014: US$24.4 million) of royalty fees under this agreement.
| (v) |
|
Share-based compensation |
The Group participates in the share-based compensation plan of LVS (Notes 18(d) and (e)).
| (b) |
|
Period-end balances between the Group and related companies |
June 30, December 31,
2015 2014
US$’000
Note(Unaudited)(Audited)
Receivables from related companies:
Intermediate
holding company 11 15
Fellow subsidiary 103 —
114 15
Payables to related companies:
LVS 3,818 3,305
Intermediate holding companies 7,118 101
Fellow subsidiaries 979 977
The receivables and payables are unsecured, interest-free and have no fixed terms of repayment.
52
SANDS
CHINA LTD. Interim Report 2015
| 18. |
|
SHARE-BASED COMPENSATION |
Total amounts of share-based compensation and the amounts capitalized are as follows:
Six months ended June 30,
2015 2014
US$’000
(Unaudited)
Share-based compensation costs:
Charged by LVS
141 390
Incurred under the Equity Award Plan of the Company 13,642 11,635
Remeasurement of cash-settled awards (1,197) —
Less: amount capitalized as part of property and equipment (283) (1,271)
Share-based compensation expensed in the consolidated
income statement 12,303 10,754
| (a) |
|
Share options of the Company |
Movements in the number of share options outstanding and their related weighted average exercise prices attributable to
the employees of the Group as grantees of the Equity Award Plan operated by the Company are as follows:
Six
months ended June 30, 2015
Weighted
Number of average
options exercise price
’000 US$
(Unaudited)
Outstanding at January 1 23,250 5.50
Granted
2,744 4.28
Exercised (1,219) 2.05
Forfeited (1,143) 6.74
Outstanding at
June 30 23,632 5.47
Exercisable at June 30 8,118 4.57
53
NOTES TO
THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
SHARE-BASED COMPENSATION (CONTINUED)
Share options of the Company (continued)
Six
months ended June 30, 2014
Weighted
Number of average
options exercise price
’000 US$
(Unaudited)
Outstanding at January 1 17,607 3.49
Granted
— —
Exercised (113) 2.07
Forfeited (245) 7.02
Outstanding at
February 14 17,249 3.45
Outstanding at February 15(i) 17,249 3.35
Granted 10,189 7.59
Exercised (2,547) 2.51
Forfeited (331) 5.30
Outstanding at June 30 24,560 5.17
Exercisable at June 30 4,628 2.42
(i) As a result of the special dividend declared on January 24, 2014, the exercise prices of the outstanding share options granted under the Equity Award Plan as at February 14,
2014 have been reduced by HK$0.77 (equivalent to US$0.099) per share option. For details, please refer to the Company’s announcement dated January 24, 2014.
| (b) |
|
Equity-settled restricted share units of the Company |
Movements in the number of unvested equity-settled restricted share units and the respective weighted average grant date
fair value attributable to the employees of the Group as grantees of the equity-settled restricted share units granted by the Company are as follows:
Six months ended June 30,
2015 2014
Weighted Weighted
Number of average grant Number of average grant
restricted date fair restricted date fair
share units(i) value(ii) share units(i) value(ii)
’000 US$ ’000 US$
(Unaudited)
Unvested at January 1 2,971 6.66
2,608 6.64
Granted 119 4.90 189 7.37
Modified to cash-settled (1,432) 5.82 — —
Unvested at June 30 1,658 7.26 2,797 6.69
(i) The number of unvested restricted share units represents the number of ordinary shares of the Company given to the employees
upon vesting.
(ii) Grant date fair value represents the fair value of the ordinary shares of the Company.
54
SANDS
CHINA LTD. Interim Report 2015
| 18. |
|
SHARE-BASED COMPENSATION (CONTINUED) (c) Cash-settled restricted share units of the Company
|
Movements in the number of unvested cash-settled restricted share units are as follows:
Six months ended June 30,
2015 2014
Number of restricted share units
’000
(Unaudited)
Unvested at January 1 —
—
Modified from equity-settled 1,432 —
Vested(700) —
Unvested at June 30 732 —
As a result
of the Company cash-settling and planning to cash-settle certain future unvested restricted share units on their vesting dates, 1,432,000 unvested restricted share units were modified from equity-settled to cash-settled. Of this amount, 700,095
restricted share units vested on a pro-rata basis in accordance with their terms during the six months ended June 30, 2015 and were cash-settled. Upon settlement, the Group will pay the grantees an amount in cash calculated based on the higher
of (i) the closing price of the Company’s shares as stated in the daily quotation sheet of The Stock Exchange on the vesting date, and (ii) the average closing price of the Company’s shares for the five trading days immediately
preceding the vesting date. If the vesting date is not a trading day or if it falls within a black out period, the trading day immediately preceding such date shall be considered the vesting date. The modification to cash-settled resulted in no
additional compensation expense. US$5.5 million was reclassified from share-based compensation reserve to liability. Until settled, the liability will be measured at the fair value of the restricted share units at the end of each reporting period
and at the date of settlement, with any changes in fair value recognized in profit or loss for the period. During the six months ended June 30, 2015, the Company paid US$2.9 million to settle vested restricted share units that were previously
classified as equity awards.
55
4.3 NOTES
TO THE CONDENSED
CONSOLIDATED FINANCIAL STATEMENTS
| 18. |
|
SHARE-BASED COMPENSATION (CONTINUED) (d) Share options of LVS |
Movements in the number of share options outstanding and their related weighted average exercise prices attributable to
the employees of the Group as grantees of the 2004 Plan operated by LVS are as follows:
Six months ended
June 30,
2015 2014
Weighted Weighted
Number of average Number of
average
options exercise price options exercise price
’000 US$ ’000 US$
(Unaudited)
Outstanding at January 1 497
70.39 671 65.23
Granted — — — —
Exercised(13) 13.83(157) 48.86
Expired(9) 79.06(10) 85.55
Outstanding at
June 30 475 71.82 504 69.92
Exercisable at June 30 475 71.82 504 69.92
| (e) |
|
Restricted shares and units of LVS |
Movements in the number of unvested restricted shares and units and the respective weighted average grant date fair value
attributable to the employees of the Group as grantees of the restricted shares and units granted by LVS are as follows:
Six months ended June 30,
2015 2014
Number of Weighted Number of Weighted
restricted average grant restricted average grant
shares and date fair shares and date fair
units(i) value(ii) units(i) value(ii)
’000
US$ ‘000 US$
(Unaudited)
Unvested at January 1 13 56.30 15 53.91
Granted 1 54.99 1 76.18
Vested(1) 76.18(1) 57.35
Unvested at June 30
13 54.69 15 55.07
The number of unvested restricted shares and units represents the number of ordinary shares
of LVS to be given to the employees upon vesting.
Grant date fair value represents the fair value of the
ordinary shares of LVS.
56
SANDS
CHINA LTD. Interim Report 2015
5. CORPORATE
INFORMATION
(as at the Latest Practicable Date)
DIRECTORS
Executive Directors
Mr. Sheldon Gary Adelson
(Chairman of the Board and Chief Executive Officer)
Mr. Robert Glen Goldstein
(Interim President)
Mr. Toh Hup Hock
(Executive Vice President and Chief Financial Officer)
Non-Executive Directors
Mr. Michael Alan Leven Mr. Charles Daniel Forman
Independent Non-Executive Directors
Mr. Iain
Ferguson Bruce Ms. Chiang Yun Mr. David Muir Turnbull Mr. Victor Patrick Hoog Antink Mr. Steven Zygmunt Strasser
REGISTERED OFFICE IN CAYMAN ISLANDS
Intertrust
Corporate Services (Cayman) Limited 190 Elgin Avenue George Town, Grand Cayman KY1-9005 Cayman Islands
PRINCIPAL PLACE OF BUSINESS AND HEAD OFFICE IN MACAO
The Venetian Macao-Resort-Hotel Executive Offices, L2
Estrada da Baia de N. Senhora da Esperanca, s/n Taipa, Macao
PRINCIPAL PLACE OF BUSINESS IN HONG KONG
Level 54, Hopewell Centre 183 Queen’s Road East Hong Kong
COMPANY’S WEBSITE
www.sandschinaltd.com
COMPANY SECRETARY
Mr. Dylan James Williams*
BOARD COMMITTEES
Audit Committee
Mr. Victor Patrick Hoog Antink (Chairman) Mr. Iain Ferguson Bruce Ms. Chiang
Yun Mr. Steven Zygmunt Strasser
Remuneration Committee
Mr. David Muir Turnbull (Chairman) Mr. Iain Ferguson Bruce Mr. Victor Patrick Hoog Antink Mr. Steven
Zygmunt Strasser
Nomination Committee
Mr. Sheldon Gary Adelson (Chairman) Mr. Iain Ferguson Bruce Mr. David Muir Turnbull
Capex Committee
Mr. Michael Alan Leven
(Chairman) Mr. Robert Glen Goldstein Mr. Victor Patrick Hoog Antink
AUTHORIZED REPRESENTATIVES
Mr. Toh Hup Hock Mr. Dylan James Williams* The Venetian Macao-Resort-Hotel Executive Offices, L2
Estrada da Baia de N. Senhora da Esperanca, s/n Taipa, Macao
CAYMAN ISLANDS PRINCIPAL SHARE REGISTRAR AND TRANSFER OFFICE
Intertrust Corporate Services (Cayman) Limited 190 Elgin Avenue George Town, Grand Cayman KY1-9005 Cayman Islands
HONG KONG SHARE REGISTRAR
Computershare Hong Kong Investor Services Limited Shops 1712–1716, 17th Floor Hopewell Centre 183 Queen’s Road East Wanchai Hong Kong
PRINCIPAL BANKERS
Banco Nacional Ultramarino S.A. Avenida Almeida Ribeiro, 22 Macao
Bank of China Limited, Macao Branch Bank of China Building Avenida Doutor Mario Soares Macao
STOCK CODE
1928
Mr. David Alec Andrew Fleming retired as Company Secretary, General Counsel, Authorized Representative and Alternate
Director to Mr. Michael Alan Leven, in each case, with effect from April 1, 2015. Mr. Dylan James Williams was appointed by the Board as Company Secretary and Authorized Representative, in each case, with effect from April 1,
2015.
57
6. CONTACT
US
INTERIM REPORT
This 2015 Interim Report is printed in English and Chinese languages and is available on our website at www.sandschinaltd.com and was posted to Shareholders.
Those Shareholders who received our 2015 Interim Report electronically and would like to receive a printed copy or vice
versa may at any time change their means of receipt of the Company’s corporate communications free of charge by reasonable notice in writing to the Company c/o the Hong Kong Share Registrar by post at Computershare Hong Kong Investor Services
Limited, 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong or by email to sandschina.ecom@computershare.com.hk.
Those Shareholders who have chosen to receive this 2015 Interim Report by electronic means and who, for any reason, have difficulty in receiving or gaining access to this 2015 Interim
Report, may also request to be sent a copy of this 2015 Interim Report in printed form free of charge by submitting a written request to the Company c/o the Hong Kong Share Registrar by post or by email.
HONG KONG SHARE REGISTRAR
Computershare Hong Kong Investor Services Limited
Address: Shops 1712–1716, 17th Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong Telephone: +852
2862 8628 Facsimile: +852 2865 0990 Email: hkinfo@computershare.com.hk
CONTACT US
Address: Level 54, Hopewell Centre, 183 Queen’s Road East, Hong Kong Telephone: +853 8118 2888 Facsimile: +853 2888
3382 Email: scl-enquiries@sands.com.mo
58
SANDS
CHINA LTD. Interim Report 2015
7. GLOSSARY
“adjusted EBITDA” adjusted EBITDA is profit attributable to equity holders of the Company before share-based
compensation, corporate expense, pre-opening expense, depreciation and amortization, net
foreign exchange gains or losses, gain or loss on disposal of property and equipment, investment
properties and intangible assets, fair value gains or losses on financial assets at fair value through
profit or loss, interest, loss on modification or early retirement of debt and income tax benefit
or expense. With respect to adjusted EBITDA for each of our properties, we make allocations of
the shared support expenses based on revenue attributable to each property. Adjusted EBITDA
is used by management as the primary measure of operating performance of our Group’s
properties and to compare the operating performance of our Group’s properties with that of its
competitors. However, adjusted EBITDA should not be considered in isolation; construed as an
alternative to profit or operating profit; as an indicator of our IFRS operating performance, other
combined operations or cash flow data; or as an alternative to cash flow as a measure of liquidity.
Adjusted EBITDA presented in the report may not be comparable to other similarly titled measures
of other companies. In addition, our adjusted EBITDA presented in the report may differ from
adjusted EBITDA presented by LVS for its Macao segment in its fillings with the U.S. Securities and
Exchange Commission
“ADR” the average daily rate per occupied room in a given time period, calculated as room revenue
divided by the number of rooms sold
“Board” the board of directors of the Company
“cage” a secure room within a casino with a facility that allows patrons to exchange cash for chips
required to participate in gaming activities, or to exchange chips for cash
“CAGR” compound annual growth rate
“Capex Committee” Sands China Capital Expenditure Committee of the Company
“casino(s)” a gaming facility that provides casino games consisting of table games operated in VIP areas or
mass market areas, electronic games, slot machines and other casino games
“Chief Executive” a person who either alone or together with one or more other persons is or will be responsible
under the immediate authority of the board of directors for the conduct of the business of the
Company
“China” or the “PRC” the People’s Republic of China excluding, for the purpose of this report only, Hong Kong, Macao
and Taiwan, unless the context otherwise requires
“chip(s)” tokens issued by a casino to players in exchange for cash or credit, which may be used to place
bets on gaming tables, in lieu of cash
“Code” Corporate Governance Code contained in Appendix 14 of the Listing Rules
“Company,” “our,” “we,” Sands China Ltd., a company incorporated in the Cayman Islands on
July 15, 2009 as an
“us,” or “Sands China” exempted company with limited liability
and, except where the context otherwise requires, all of
its subsidiaries, or where the context refers to the
time before it became the holding company of
its present subsidiaries, its present subsidiaries. When used in
the context of gaming operations
or the Subconcession, “we,” “us,” or “our”
refers exclusively to VML
59
7.
GLOSSARY
“Company Code” the Company’s own securities trading code for securities transactions
by the Directors and
relevant employees
“Concessionaire(s)” the holder(s) of a concession for the operation of casino games in the MSAR. As at the
Latest
Practicable Date, the Concessionaires were Galaxy, SJM and Wynn Macau
“Controlling has the meaning ascribed to it under the Listing Rules and, with respect to our Company, the
Shareholder(s)” controlling Shareholders as referred to in “Relationship with Our Controlling Shareholders”
of
our Prospectus
“Cotai” the name given to the land reclamation area in the MSAR between the islands of Coloane and
Taipa
“Cotai Strip” integrated resort
projects on Cotai being developed by us and inspired by the Las Vegas Strip in
Las Vegas, Nevada, U.S.A. LVS
has registered the Cotai Strip trademark in Hong Kong and Macao
“DICJ” Gaming Inspection and
Coordination Bureau (“Direcção de Inspecção e Coordenação de Jogos”)
under the Secretary for Economy and Finance of the MSAR
“Director(s)” member(s) of the board of directors of the Company
“DSEC” the Statistics and Census Service of the MSAR
“Deloitte” Deloitte Touche Tohmatsu
“EBITDA” earnings before interest, taxes, depreciation and amortization
“Equity Award Plan” the Equity Award Plan conditionally adopted by our Company on November 8, 2009
“Exchange Rate” save as otherwise stated, amounts denominated in U.S. dollars, MOP and Hong Kong
dollars have
been converted, for the purposes of illustration only, in this report at:
“Four Seasons Hotel” refers to the Four Seasons Hotel Macao, Cotai Strip®, which is managed and operated by FS
Macau Lda., an affiliate of Four Seasons Hotels Limited
“Galaxy” Galaxy Casino S.A. (also known as Galaxy Casino Company Limited), a company incorporated in
Macao on November 30, 2001 and one of the three Concessionaires
“gaming area(s)” a gaming facility that provides casino games consisting of table games operated in VIP areas or
mass market areas, electronic games, slot machines and other casino games but has not been
designated as a casino by the Macao Government
60
SANDS
CHINA LTD. Interim Report 2015
“gaming promoter(s)” individuals or corporations licensed by and
registered with the Macao Government to promote
games of fortune and chance to patrons, through the
arrangement of certain services, including
extension of credit (regulated by Law No. 5/2004),
transportation, accommodation, dining and
entertainment, whose activity is regulated by Administrative
Regulation No. 6/2002
“GDP” gross domestic product
“Global Offering” the offer of Shares in the Company by subscription for cash at HK$10.38 on November 30,
2009
on and subject to the terms outlined in the Prospectus
“Group” our Company and its subsidiaries and, in respect of the period before our Company became the
holding company of such subsidiaries, the entities that carried on the business of the present
Group at the relevant time
“HIBOR” the Hong Kong Interbank Offered Rate
“HK$” or “HK dollars” Hong Kong dollars, the lawful currency of Hong Kong
“Hong Kong” the Hong Kong Special Administrative Region of the PRC
“IFRS” International Financial Reporting Standards
“integrated resort(s)” a resort which provides customers with a combination of hotel accommodations, casinos or
gaming areas, retail and dining facilities, MICE space, entertainment venues and spas
“Latest Practicable Date” August 14, 2015
“LIBOR” London Interbank Offered Rate
“Listing” the listing of the Shares on the Main Board on November 30, 2009
“Listing Date” November 30, 2009, the date on which dealings in the Shares first commenced on the Main
Board
“Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange (as amended from time to
time)
“LVS” Las Vegas Sands Corp., a company incorporated in Nevada, U.S.A. in August 2004 and the
common stock of which is listed on the New York Stock Exchange
“LVS Group” LVS and its subsidiaries (excluding our Group)
“Macao” or “MSAR” the Macao Special Administrative Region of the PRC
“Macao Government” the local government of the MSAR, established on December 20, 1999 and the local
administration before this date
61
7.
GLOSSARY
“Main Board” the stock exchange (excluding the option market) operated by the Stock
Exchange which
is independent of and operated in parallel with the Growth Enterprise Market of the Stock
Exchange
“mass market player(s)” Non-Rolling Chip and slot players
“Melco Crown” Melco Crown Jogos (Macau), S.A., a private company limited by shares (“sociedade anónima”)
incorporated on May 10, 2006 under the laws of Macao and one of the three Subconcessionaires
“MGM Grand Paradise” MGM Grand Paradise, S.A. (also known as MGM Grand Paradise Limited), a private company
limited by shares (“sociedade anónima”) incorporated on June 17, 2004 under the laws of
Macao
and one of the three Subconcessionaires
“MICE” Meetings, Incentives, Conventions and Exhibitions, an acronym commonly used to refer to
tourism involving large groups brought together for an event or corporate meeting
“Model Code” Model Code for Securities Transactions by Directors of Listed Issuers as set out in Appendix 10 of
the Listing Rules
“MOP” or “pataca(s)” Macao pataca, the lawful currency of Macao
“Parcel 1” a land parcel in Cotai totaling 290,562 square meters described under Registration No. 23225 by
the Macau Property Registry, on which The Venetian Macao has been constructed
“Parcel 2” a land parcel in Cotai totaling 53,303 square meters described under Registration No. 23223 by
the Macau Property Registry, on which The Plaza Macao has been constructed
“Parcel 3” a land parcel in Cotai totaling 61,681 square meters described under Registration No. 23224 by
the Macau Property Registry, on which The Parisian Macao is being developed
“Parcels 5 and 6” land parcels in Cotai totaling 150,134 square meters, including 44,576 square meters
designated
as a tropical garden, described under Registration No. 23288 by the Macau Property Registry,
on
which Sands Cotai Central has been constructed
“premium player(s)” Rolling Chip players who have a direct relationship with gaming operators and typically
participate in gaming activities in casinos or gaming areas without the use of gaming promoters
“Prospectus” our Listing prospectus dated November 16, 2009, which is available from our website at
www.sandschinaltd.com
“Reporting Period” January 1, 2015 to June 30, 2015
“RMB” or “Renminbi” Renminbi, the lawful currency of China
“Rolling Chip play” play by VIP and premium players (excludes Paiza cash players) using non-negotiable chips
62
SANDS
CHINA LTD. Interim Report 2015
“Rolling Chip volume” casino revenue measurement, measured as the sum
of all non-negotiable chips wagered and lost
by VIP and premium players (excludes Paiza cash players)
“Sands Cotai Central” Our integrated resort development on Parcels 5 and 6. On April 11, 2012,
the first hotel tower
of parcel 5 opened and features 636 rooms and suites under the Conrad hotel brand and
1,224
rooms under the Holiday Inn hotel brand. The Group also opened significant gaming, MICE,
retail space and other integrated resort amenities, all of which are operated by the Group. On
September 20, 2012, the first hotel tower on parcel 6 opened and features 1,796 Sheraton-
branded hotel rooms and suites, along with additional gaming area, retail, entertainment, dining
and MICE facilities, which are operated by the Group. On January 28, 2013, the second hotel
tower on parcel 6 opened and features 2,067 additional Sheraton-branded hotel rooms and
suites. We have begun construction on the remaining phase of the project on parcel 5, which will
include a fourth hotel and mixed-use tower under the St. Regis brand
“Sands Macao” the Sands Macao, which includes gaming areas, a hotel tower, restaurants and a theater
“Sands Resorts Cotai the name given to our integrated resorts on Cotai
Strip Macao”
“SFO” the Securities and Futures Ordinance of Hong Kong (Chapter 571 of the Laws of Hong Kong) as
amended, supplemented or otherwise modified from time to time
“Share(s)” ordinary shares in our Company with a nominal value of US$0.01 each
“Shareholder(s)” holder(s) of Shares
“SJM” Sociedade de Jogos de Macau, S.A., a private company limited by shares (“sociedade
anónima”), incorporated on November 28, 2001 under the laws of Macao and one of the three
Concessionaires
“Stock Exchange” The Stock Exchange of Hong Kong Limited
“Subconcession” or the tripartite Subconcession Contract for the operation of casino games dated December 26,
“Subconcession 2002 among Galaxy, the Macao Government and VML
Contract”
“Subconcessionaire(s)” the holder(s) of a subconcession for the operation of casino games in the MSAR. As at the Latest
Practicable Date, the Subconcessionaires were VML (one of our subsidiaries), Melco Crown and
MGM Grand Paradise
“table games” typical casino games, including card games such as baccarat, blackjack and hi-lo (also known as
“sic bo”) as well as craps and roulette
“The Parisian Macao” an integrated resort being developed on Parcel 3, which will include a gaming area, hotel, a
shopping mall and other integrated resort amenities
63
7.
GLOSSARY
“The Plaza Macao” an integrated resort which includes (i) the Four Seasons Hotel;
(ii) the Plaza Casino gaming area
operated by VML; (iii) the Paiza Mansions, the Shoppes at Four
Seasons, restaurants and a spa,
each of which are operated by us; and (iv) a luxury apart-hotel tower,
which is anticipated to be
branded and serviced by Four Seasons; except where the context indicates otherwise
“The Venetian Macao” The Venetian® Macao-Resort-Hotel, an integrated resort that includes casino
and gaming areas,
a hotel, MICE space, the Shoppes at Venetian, over 50 different restaurants and food
outlets, a
15,000-seat arena and other entertainment venues
“TTFT” the Taipa Temporary Ferry Terminal, a ferry terminal in Taipa, Macao, which was developed and
is owned by the Macao Government. The terminal opened in October 2007 and is an interim
facility. It is expected to be replaced by a permanent ferry terminal in Taipa, which is currently
under construction by the Macao Government
“United States,” “U.S.” the United States of America, including its territories and possessions and all areas subject to its
or “U.S.A.” jurisdiction
“US$” or “U.S. dollars” United States dollars, the lawful currency of the United States
“VIP player(s)” Rolling Chip players who play almost exclusively in dedicated VIP rooms or designated casino or
gaming areas and are sourced from gaming promoters
“VIP room(s)” rooms or designated areas within a casino or gaming area where VIP players and premium players
gamble
“visit(s)” or “visitation(s)” with respect to visitation of our properties, the number of times a property is entered during a
fixed time period. Estimates of the number of visits to our properties is based on information
collected from digital cameras placed above every entrance in our properties which use video
signal image processor detection and include repeat visitors to our properties on a given day
“VML” our subsidiary, Venetian Macau, S.A. (also known as Venetian Macau Limited), a private company
limited by shares (“sociedade anónima”) incorporated on June 21, 2002 under the laws of
Macao, one of the three Subconcessionaires and the holder of the Subconcession
“VOL” Venetian Orient Limited, a wholly owned subsidiary of the Company and owner and developer of
Sands Cotai Central
“VVDIL” our subsidiary, Venetian Venture Development Intermediate Limited, a company incorporated in
the Cayman Islands on June 21, 2002 as an exempted company with limited liability
“VVDI (II)” Venetian Venture Development Intermediate II, a company incorporated in the Cayman Islands
on January 23, 2003 as an exempted company with limited liability and an indirect, wholly owned
subsidiary of LVS and our immediate Controlling Shareholder
“Wynn Macau” Wynn Resorts (Macau) S.A., a private company limited by shares (“sociedade anónima”)
incorporated on October 17, 2001 under the laws of Macao and one of the three Concessionaires
64
Las Vegas Sands (NYSE:LVS)
Historical Stock Chart
From Mar 2024 to Apr 2024
Las Vegas Sands (NYSE:LVS)
Historical Stock Chart
From Apr 2023 to Apr 2024
