Press Release: Las Vegas Sands, Inc.
February 6, 2002
LAS VEGAS, NV -- Las Vegas Sands Inc., owner and operator of The Venetian Casino Resort and The Grand Canal Shops,
yesterday reported results for the fourth quarter and full year 2001.
Las Vegas Sands, Inc., reported net income during the fourth quarter of 2001 of $1.0 million as compared to net
income of $5.1 million during the fourth quarter of 2000. Earnings before interest, taxes, depreciation, amortization
and rent (EBITDAR) for the fourth quarter 2001 was $42.2 million compared to $49.0 million for the fourth quarter
of 2000. Total net revenue for the fourth quarter of 2001 was $121.8 million, as compared to $148.5 million during
the fourth quarter of 2000.
Net income before extraordinary item was $0.1 million for the full year 2001, as compared to net income before
extraordinary item of $18.7 million for the full year 2000. EBITDAR for the full year 2001 was $164.6 million,
as compared to $193.5 million for 2000. Net revenues for the full year 2001 totaled $523.9 million, as compared
to $581.0 million for 2000.
William P. Weidner, President and Chief Operating Officer of Las Vegas Sands Inc., stated, ``We are pleased with
achieving $42.2 million of property EBITDAR for the fourth quarter of 2001 in the face of a slowing economy and
travel disruption to Las Vegas during the quarter. The Venetian room business showed remarkable resilience and
strength during the quarter and year, in reaching total room revenue of $204.2 million during the year, as compared
to $192.3 million in the prior year, with an average daily room rate of $196 for the year 2001, compared to $182
for the year 2000. Occupancy for the year 2001 was 94.6%, compared to 95.2% during 2000. The strong room demand
at The Venetian continued in spite of travel disruption resulting from the September terrorist attacks in the fourth
quarter of 2001. Our occupancy was 95.2%, as compared to 94.4% for the previous year's fourth quarter. Obviously,
room rates were affected during the fourth quarter, with an average daily rate of $168, compared to $197 for the
fourth quarter of 2000, but have recovered as our room business continues its strong, positive trends and the economy
recovers. These strong trends were demonstrated in early 2002 by average daily room rates of $213 in January and
occupancy at 96%, as compared to $207 and occupancy of 98% in January 2001. Based on currently available information,
we estimate our group room revenue, definitively and tentatively booked for 2002, now at approximately $86 million,
the same as this point in time last year for group room revenue booked for 2001. In addition to the strong room
demand trends, our group room business continues to have attrition and cancellation provisions to provide further
protection.''
The Venetian
EBITDAR at The Venetian was $36.9 million, as compared to the fourth quarter 2000 results of $43.9 million. EBITDAR
margins for the fourth quarter 2001 were 32.6%, compared to 31.2% for the fourth quarter of 2000. Mr. Weidner indicated,
``This favorable increase in operating margins was a result of focusing and improving on significant operating
efficiencies within The Venetian.'' EBITDAR for the full year 2001 was $145.0 million as compared to $176.3 million
for 2000. The Venetian generated total net revenues of $113.2 million during the fourth quarter 2001, as compared
to $140.9 million during the fourth quarter 2000.
The 2001 operating results at The Venetian were negatively impacted by the year 2001 overall table games hold percentage
of 15.3%, which was lower than the 20.5% overall table games hold percentage experienced during the full year of
2000 (calculated before discounts). Weidner indicated, ``The overall table games hold percentage improved to 18.7%
during the last seven months of 2001 and that, The Venetian table games volume was $184.3 million during the fourth
quarter 2001, as compared to $271.3 million in the prior year's fourth quarter, as a result of a reluctance to
travel from certain casino marketing segments early in the fourth quarter, and our heightened selectivity of casino
customers in a competitive market. Our slot machine business was also negatively impacted during the fourth quarter
with slot win per unit per day of $132 versus $140 during the prior year's fourth quarter (amounts calculated before
cash back rebates).''
Food and beverage revenues were $12.9 million in the fourth quarter of 2001, as compared to $17.6 million during
the prior year's fourth quarter. The decline was attributed to a decrease in group business early in the fourth
quarter, which resulted from travel disruption to Las Vegas. Mr. Weidner indicated, ``Food and beverage revenues
during January 2002 have increased approximately 8% over January 2001 food and beverage revenues.''
The Grand Canal Shops
The Grand Canal Shops generated rental and related revenues of $8.7 million during the fourth quarter of 2001,
as compared to $7.6 million during the fourth quarter of 2000, and EBITDAR of $5.3 million during the fourth quarter
of 2001, as compared to $5.0 million during the fourth quarter of 2000. EBITDAR for the full year 2001 was $19.5
million, as compared to $17.2 million during 2000. Mr. Weidner indicated, ``We are especially pleased to see The
Grand Canal Shops increase its financial performance in the midst of a challenging economic and travel environment.
The Grand Canal Shops has matured into one of the premier malls in the United States as a result of the continuing
demand for space and increased foot traffic and tenant sales.''
Other Factors Affecting Fourth-Quarter Earnings
Corporate expense not allocated to specific properties was $1.6 million during the fourth quarter of 2001, as compared
to $1.8 million during the fourth quarter of 2000.
Net interest expense was $27.5 million for the fourth quarter of 2001, as compared to $30.0 million during the
prior year's fourth quarter. The decrease was a result of reductions in interest rates associated with the Company's
rate sensitive debt during the past year.
Balance Sheet Items And Capital Expenditures
Long-term debt of Las Vegas Sands, Inc., including the current portion, was approximately $941 million at the end
of 2001, compared with $913 million at the end of the prior year 2000. Included in long-term debt is the Working
Capital Revolver balance of $40 million at the end of the year 2001. The Revolver balance is currently $35 million,
and the Company plans to continue to pay down the Revolver with excess cash flow during the first quarter. Total
cash and cash equivalents for the Company were $57 million at the end of 2001, compared to $45 million at the end
of the prior year. The Company also currently has approximately $16 million of additional, available liquidity
under the Phase II Subsidiary line of credit.
The Company's capital expenditures for 2001 were $56 million. Based upon current information, the Company plans
to spend $30 million for capital expenditures during 2002, of which $23 million is to liquidate construction payables
associated with capital improvements undertaken during 2001.
Highlights of significant improvements to The Venetian during the year were:
Las Vegas Sands, Inc. is a hotel, gaming, and retail mall company headquartered in Las Vegas, Nevada, which
owns and operates through subsidiaries, The Venetian Casino Resort and The Grand Canal Shops, located on the Las
Vegas Strip.
Forward-looking Statements
This release includes ``forward-looking statements'' intended to qualify for the safe harbor from liability established
by the Private Securities Litigation Reform Act of 1995. These forward-looking statements generally can be identified
by phrases such as the Company ``believes,'' ``expects,'' ``anticipates,'' ``plans,'' ``foresees,'' ``forecasts,''
``estimates'' or other words or phrases of similar import. Similarly, such statements herein that describe the
Company's business strategy, outlook, objectives, plans, intentions or goals are also forward-looking statements.
All such forward-looking statements are subject to certain risks and uncertainties that could cause actual results
to differ materially from those in forward-looking statements. Such risks and uncertainties include, but are not
limited to, economic, bank and debt-market conditions, changes in laws or regulations, third-party relations and
approvals, decisions of courts, regulators and governmental bodies, factors affecting leverage, including interest
rates, abnormal gaming holds, construction disruptions and delays, ineffective marketing, effects of competition
and other risks and uncertainties described from time to time in our reports filed with the U.S. Securities and
Exchange Commission. The forward-looking statements made in this release reflect the opinion of management as of
today. Be advised that developments subsequent to this release are likely to cause these statements to become outdated
with the passage of time. The Company does not intend, however, to update the guidance provided today prior to
its next earnings release.
Las Vegas Sands Inc.
Condensed Consolidated Statements of Operations
(In thousands)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
2001 2000 2001 2000
------------------ -------------------
Revenues:
Casino $53,107 $70,483 $227,240 $299,082
Rooms 44,540 51,778 204,242 192,327
Food and Beverage 12,889 17,581 61,977 67,053
Grand Canal Shops 8,671 7,645 33,492 29,867
Retail 1,625 2,245 8,136 9,055
Other 11,225 10,495 31,406 29,882
-------- -------- -------- --------
132,057 160,227 566,493 627,266
Less - Promotional
Allowances (10,210) (11,699) (42,594) (46,296)
-------- -------- -------- --------
121,847 148,528 523,899 580,970
-------- -------- -------- --------
Operating Costs and Expenses:
Venetian Casino-Hotel
Operations 75,887 96,940 345,045 374,851
Grand Canal Shops
Operations 3,415 2,620 13,947 12,622
Rental Expense 1,787 2,096 8,074 8,727
Corporate Expense 1,635 1,774 6,376 6,275
Pre-opening Expense 355 -- 355 --
Depreciation and
Amortization 10,484 10,477 40,823 41,722
-------- -------- -------- --------
93,563 113,907 414,620 444,197
-------- -------- -------- --------
Operating income 28,284 34,621 109,279 136,773
Interest Cost, Net of
Amounts Capitalized (27,531) (30,045) (110,547) (119,807)
Interest Income 250 572 1,385 1,771
-------- -------- -------- --------
Income (loss) before
Extraordinary Item 1,003 5,148 117 18,737
Extraordinary Item: Loss on
Early Retirement of Debt -- -- (1,383) (2,785)
-------- -------- -------- --------
Net Income (loss) $1,003 $5,148 $(1,266) $15,952
======== ======== ======== ========
Las Vegas Sands Inc.
Supplemental Data Schedule
(Unaudited)
(In thousands) except room and other information
Three Months Ended Twelve Months Ended
December 31, December 31,
2001 2000 2001 2000
------------------- -------------------
Revenues:
The Venetian $123,386 $152,582 $533,001 $597,399
Less: Promotional
allowances (10,210) (11,699) (42,594) (46,296)
Net revenues 113,176 140,883 490,407 551,103
The Grand Canal Shops 9,027 7,824 34,707 30,781
Less: Eliminations (356) (179) (1,215) (914)
Net revenues 8,671 7,645 33,492 29,867
The Phase II Subsidiary (b) 1,622 -- 1,622 --
Less: Eliminations (1,622) -- (1,622) --
-------- -------- -------- --------
121,847 148,528 523,899 580,970
Gross Operating Profit:
The Venetian 26,349 32,992 103,051 132,502
The Grand Canal Shops 3,570 3,403 12,604 10,546
Corporate (1,635) (1,774) (6,376) (6,275)
-------- -------- -------- --------
28,284 34,621 109,279 136,773
EBITDAR (a,b):
The Venetian 36,934 43,943 145,007 176,252
The Grand Canal Shops 5,256 5,025 19,545 17,245
-------- -------- -------- --------
42,190 48,968 164,552 193,497
EBITDA (a,b):
The Venetian 35,667 42,336 139,090 169,682
The Grand Canal Shops 4,736 4,536 17,388 15,088
-------- -------- -------- --------
40,403 46,872 156,478 184,770
Room Statistics
for the Venetian:
Occupancy % 95.2% 94.4% 94.6% 95.2%
Average Daily
Room Rate (ADR) $168 $197 $196 $182
Revenue per available
room (REVPAR) $160 $186 $185 $174
Other information:
Table games drop
per unit per day $16,370 $24,168 $21,560 $25,241
Slot Machine handle
per unit per day $2,135 $2,605 $2,316 $2,454
Average number
of table games 122 122 123 122
Average number
of slot machines 2,124 2,166 2,159 2,159
(a) Property EBITDAR (earnings before interest, income taxes, depreciation, amortization and rental expenses) consists
of Operating Profit before depreciation, amortization and rental expenses. Property EBITDAR and EBITDA (after rental
expense) are supplemental financial measures used by management, as well as industry analysts, to evaluate our
operations. However, these measures should not be interpreted as alternatives to income from operations (as an
indicator of our operating performance) or to cash flows from operations (as a measure of liquidity) as determined
in accordance with generally accepted accounting principles. All companies do not calculate EBITDAR or EBITDA in
the same manner. As a result, EBITDAR and EBITDA as presented by our Company may not be comparable to similarly
titled measures presented by other companies. Las Vegas Sands Inc. corporate expenses are not allocated to the
operating properties in calculating EBITDAR & EBITDA.
(b) The Phase II Subsidiary (Lido Casino Resort, LLC) leases to its parent company the Venetian approximately 15
acres of land on the Las Vegas Strip for rent of $8 million per year effective October 19, 2001. The rental income
to the Phase II Subsidiary and rental expense to the Venetian are eliminated in consolidation and are therefore
not included in presentation of EBITDAR and EBITDA above and in the narrative of this earnings release. The Phase
II Subsidiary is not a guarantor of the Company's debt.
-------------------------------------------------
Contact:
Las Vegas Sands, Inc.
William P. Weidner, 702/733-5733