What changed in this filing

/stocks — the workspaceLOADING

Item 2. Management’s Discussion and Analysis

2020-10-23 compared with 2020-07-24 · 229 added, 221 removed, 756 unchanged (37% of the section changed)

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In early January 2020, an outbreak of a respiratory illness caused by a novel coronavirus was identified and the disease has since spread rapidly across the world causing the World Health Organization to declare the outbreak of a pandemic on March 12, 2020 (the “COVID-19 Pandemic”).

As a result, people across the globe have been advised to avoid non-essential travel.

Steps have also been taken by various countries, including those in which we operate, to restrict inbound international travel and implement closures of non-essential operations to contain the spread of the virus.

As a result, people across the globe were advised to avoid non-essential travel.

Steps were also taken by various countries, including those in which we operate, to restrict inbound international travel and implement closures of non-essential operations to contain the spread of the virus.

Visitation to Macao has decreased substantially, driven by various government policies limiting travel.

The China Individual Visit Scheme to Macao (“China IVS”) and group tour schemes have been suspended, and a complete ban on entry, or a need to undergo enhanced quarantine requirements depending on the person’s residency and their recent travel history, has been enacted by the government for Macao residents, citizens of the People’s Republic of China, Hong Kong residents, foreigner workers residing in Macao and international travelers.

On July 13, 2020 it was announced anyone entering Guangdong from Macao is exempt from the 14-day mandatory quarantine starting on July 15, 2020, with a negative COVID-19 test and a green health-code.

The China Individual Visit Scheme to Macao (“China IVS”) and group tour schemes were suspended, and a complete ban on entry, or a need to undergo enhanced quarantine requirements depending on the person’s residency and their recent travel history, had been enacted by the government for Macao residents, residents of the People’s Republic of China, Hong Kong residents, foreigner workers residing in Macao and international travelers.

The China IVS and group tour scheme recommenced for certain regions beginning on August 12, 2020 and were extended to all of mainland China effective September 23, 2020.

All China residents with the appropriate travel documents, a negative COVID-19 test result and a green health-code are exempt from quarantine.

Hong Kong and Taiwan residents who have not visited a foreign country in the prior 14 days and tested negative for COVID-19 are allowed to enter Macao subject to a mandatory 14 days of centralized isolation.

All other foreign nationals, including those holding a temporary work permit, currently are not permitted to enter Macao.

The Macao government suspended all gaming operations beginning on February 5, 2020.

Our Macao casino operations resumed on February 20, 2020, except for casino operations at Sands Cotai Central, which resumed on February 27, 2020.

Certain health safeguards, however, such as limiting the number of seats per table game, slot machine spacing, temperature checks, mask protection and health declarations remain in effect at the present time.

Our Macao casino operations resumed on February 20, 2020, except for operations at Sands Cotai Central, which resumed on February 27, 2020.

Additional health safeguards, such as the requirement to present a negative COVID-19 test certificate prior to entering the casino, have been implemented, as well as the ongoing limitation on the number of seats per table game, slot machine spacing, temperature checks and mandatory mask protection.

Our management team is currently unable to determine when these measures will be modified or cease to be necessary.

Some of our Macao hotel facilities were also closed during the casino suspension in response to the drop in visitation and, with the exception of the Conrad Macao Cotai Strip at Sands Cotai Central (the “Conrad hotel”), these hotels were gradually reopened from February 20, 2020, in line with operational needs and demand.

The Conrad hotel reopened on June 13, 2020.

Additionally, on March 28, 2020, in support of the Macao government’s initiatives to fight the COVID-19 Pandemic, the Company provided one tower (approximately 2,000 hotel rooms) at the Sheraton Grand Macao Hotel, Cotai Strip at Sands Cotai Central to the Macao government to house Macao citizens and others upon their initial return from other jurisdictions for quarantine.

The use of this tower by the Macao government ceased on May 1, 2020, but was subsequently reactivated on June 7, 2020.

A limited number of restaurants across our Macao properties have reopened.

Some of our Macao hotel facilities were also closed during the casino suspension in response to the drop in visitation and, with the exception of the Conrad Macao Cotai Strip at Sands Cotai Central (the “Conrad hotel”), which reopened on June 13, 2020, these hotels were gradually reopened from February 20, 2020, and remain open and operational.

Additionally, from March 28 through April 30, 2020 and from June 7 through August 14, 2020 , in support of the Macao government’s initiatives to fight the COVID-19 Pandemic, we provided one tower (approximately 2,000 hotel rooms) at the Sheraton Grand Macao Hotel, Cotai Strip at Sands Cotai Central to the Macao government to house individuals who return to Macao for quarantine purposes.

Restaurants across our Macao properties are progressively reopening as guest visitation increases.

The majority of retail outlets in the various shopping malls are open with reduced operating hours.

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The timing and manner in which our normal ferry operations will be able to resume are currently unknown.

The Macao government announced total visitation from mainland China to Macao on a monthly basis decreased by 14.9% (with an 83.3% decrease in visitation over the first seven days of Chinese New Year) in January 2020 and decreased in a range of 96.3% to 99.6% in February to May 2020, as compared to the same periods in 2019.

It also announced monthly gross gaming revenue decreased by 11.3% in January 2020 and decreased in a range of 79.7% to 97.0% in February to June 2020, as compared to the same periods in 2019.

Our operations in Macao have been significantly impacted by the lack of visitation to Macao.

The Macao government announced total visitation from mainland China to Macao decreased 69.2% and 99.3% for the quarters ended March 31 and June 30, 2020, respectively, and decreased by 97.4% and 92.4% in July and August 2020, as

compared to the same periods in 2019.

The Macao government also announced gross gaming revenue decreased by 82.5% in the nine months ended September 2020, as compared to the same period in 2019.

Beginning on April 7, 2020, the Singapore government suspended all casino and non-essential operations, including all operations at Marina Bay Sands, due to the COVID-19 Pandemic.

The Company’s Singapore operations were permitted to reopen beginning on June 19, 2020;

Our Singapore operations were permitted to reopen beginning on June 19, 2020;

however, this only included certain restaurants and the retail mall operations.

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All operations are currently subject to limited capacities.

On May 28, 2020, in support of the Singapore government’s initiatives to fight the COVID-19 Pandemic, Marina Bay Sands entered into an agreement with the Singapore government to utilize all three hotel towers to house Singapore citizens upon their initial return from other jurisdictions for quarantine.

The government’s use of the first tower ceased on June 26, 2020, while usage of the second and third towers will continue through July 26, 2020.

Additionally, beginning on July 17, 2020, the first tower reopened for normal operations.

The date on which convention and nightlife venues may reopen is unknown at this time.

On May 28, 2020, in support of the Singapore government’s initiatives to fight the COVID-19 Pandemic, Marina Bay Sands entered into an agreement with the Singapore government to utilize all three hotel towers to house Singapore residents upon their initial return from other jurisdictions for quarantine.

The government’s use of the first tower ceased on June 26, 2020, while usage of the second and third towers continued through July 26, 2020.

Beginning on July 17, 2020, the first tower reopened for normal operations, while the second and third towers reopened on August 1, 2020.

On September 7, 2020, the Singapore Tourism Board announced that event organizers are allowed to apply for pilot events with limited capacities of up to 250 attendees from October 1, 2020.

The date on which nightlife venues may reopen is unknown at this time.

In the months leading up to the closure, visitation to Marina Bay Sands declined.

The Singapore Tourism Board announced for the quarter ended March 31, 2020, the total change in visitation decreased approximately 64%, as compared to the same periods in 2019.

Total visitation decreased by approximately 100% in April and May 2020, as compared to the same periods in 2019.

The Singapore Tourism Board announced for the quarters ended March 31 and June 30, 2020, total visitation to Singapore decreased approximately 43.2% and 100%, respectively, as compared to the same periods in 2019.

Total visitation decreased by approximately 99.6% and 99.5% in July and August 2020, respectively, as compared to the same periods in 2019.

On March 17, 2020, the Nevada government suspended all casino and non-essential operations, including all operations at the Las Vegas Operating Properties, beginning on March 18, 2020, due to the COVID-19 Pandemic.

On May 28, 2020, the Nevada government announced casinos could reopen on June 4, 2020, under strict guidelines issued by the Gaming Control Board and the State of Nevada.

We opened the casino, suites within The Venetian Tower and The Palazzo Tower, and select food and beverage outlets on June 4, 2020, with certain operations subject to reduced capacity.

Convention, meeting and certain entertainment related operations remain closed.

We reopened the casino, suites within The Venetian Tower and The Palazzo Tower, and select food and beverage outlets on June 4, 2020, with certain operations subject to reduced capacity.

Beginning October 1, 2020, the limit for both public and private events was increased from 50 people to the lesser of 250 people or 50% of the room’s capacity (excluding employees, organizers and performers) provided social distancing measures and various safety and related protocols can be followed.

Meetings, incentives, conventions and exhibitions (“MICE”) for more than 250 people, but no more than 1,000 people, may be held subject to certain requirements.

Larger venues, defined as having more than a 2,500 fixed-seating capacity, may host a gathering of 10% of their total capacity provided they meet additional requirements.

Visitation to our Las Vegas Operating Properties declined in the months leading up to the closure.

The Las Vegas Convention and Visitors Authority announced for the quarter ended March 31, 2020, the total change in visitation decreased 18.3%, as compared to the same period in 2019.

Total visitation decreased by 97% and 95.9% in April and May 2020, respectively, as compared to the same periods in 2019.

It also announced for the quarter ended March 31, 2020, gross gaming revenue for the Las Vegas Strip decreased 12.4%, as compared to the same periods in 2019.

Total gross gaming revenue decreased by 99.3% in April and May 2020, as compared to the same periods in 2019.

The Las Vegas Convention and Visitors Authority announced for the quarters ended March 31 and June 30, 2020, visitation to Las Vegas decreased 18.3% and 87.8%, respectively, as compared to the same periods in 2019.

Total visitation decreased by 61% and 57% in July and August 2020, respectively, as compared to the same periods in 2019.

The Las Vegas Convention and Visitors Authority also announced for the quarters ended March 31 and June 30, 2020, gross gaming revenue for the Las Vegas Strip decreased 12.4% and 84.8%, respectively, as compared to the same periods in 2019.

Total gross gaming revenue decreased by 39.2% in July and August 2020, as compared to the same periods in 2019.

In connection with reopening the Singapore and Las Vegas properties, we are adhering to social distancing requirements, which include reduced seating at table games and a decreased number of active slot machines on the casino floor.

Additionally, there is uncertainty around the impact the COVID-19 Pandemic will have on operations in the months that follow reopening.

For example, there have been a number of group cancellations through October 2020 and there may be additional restrictions placed on our other services, such as nightclubs and entertainment venues.

Additionally, there is uncertainty around the impact the COVID-19 Pandemic will continue to have on operations in future periods.

For example, there have been a number of group cancellations or groups rescheduling their events through the second quarter of 2021 and there may be additional restrictions placed on our other services, such as nightclubs and entertainment venues.

If our Integrated Resorts are not permitted to resume normal operations, travel restrictions such as those related to the China IVS and other global restrictions on inbound travel from other countries are not modified or eliminated or the global response to contain the COVID-19 Pandemic escalates or is unsuccessful, our operations, cash flows and financial condition will be further materially impacted.

We have a strong balance sheet and sufficient liquidity in place, including total cash and cash equivalents balance, excluding restricted cash and cash equivalents, of $3.02 billion and access to $1.50 billion, $2.02 billion and $425 million of available borrowing capacity from our LVSC Revolving Facility, 2018 SCL Revolving Facility and the 2012 Singapore Revolving Facility, respectively, and 3.75 billion Singapore dollars (“SGD,” approximately $2.69 billion at exchange rates in effect on June 30, 2020) under our Singapore Delayed Draw Term Facility, exclusively for capital expenditures for the MBS Expansion Project, as of June 30, 2020.

While each of our properties are currently open and operating at reduced levels due to lower visitation and the implementation of required safety measures as described above, the current economic and regulatory environment on a global basis and in each of our jurisdictions continues to evolve.

We cannot predict the manner in which governments will react as the global and regional impact of COVID-19 changes over time, which could significantly alter our current operations.

We have a strong balance sheet and sufficient liquidity in place, including total cash and cash equivalents balance, excluding restricted cash and cash equivalents, of $2.38 billion and access to $1.50 billion, $2.02 billion and $433 million of available borrowing capacity from our LVSC Revolving Facility, 2018 SCL Revolving Facility and the 2012 Singapore Revolving Facility, respectively, and 3.69 billion Singapore dollars (“SGD,” approximately $2.69 billion at exchange rates in effect on September 30, 2020) under our Singapore Delayed Draw Term Facility, exclusively for capital expenditures for the MBS Expansion Project, as of September 30, 2020.

We also have the option to increase the total borrowing capacity under our 2018 SCL Revolving Facility by an aggregate total amount of up to $1.0 billion, for an aggregate total available borrowing capacity of up to $3.0 billion.

We believe we are able to support continuing operations, complete the major construction projects that are underway and respond to the current COVID-19 Pandemic challenges.

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For a discussion of our significant accounting policies and estimates, please refer to “Management’s Discussion and Analysis of Financial Condition and Results of Operations” presented in our 2019 Annual Report on Form 10-K filed on February 7, 2020.

There were no newly identified significant accounting estimates during the six months ended June 30, 2020, nor were there any material changes to the critical accounting policies and estimates discussed in our 2019 Annual Report.

There were no newly identified significant accounting estimates during the nine months ended September 30, 2020, nor were there any material changes to the critical accounting policies and estimates discussed in our 2019 Annual Report.

Recent Accounting Pronouncements

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Our Rolling Chip table games are expected to produce a win percentage of 3.15% to 3.45% in Macao and Singapore, and our Non-Rolling Chip table games have produced a trailing 12-month win percentage of 25.9%, 22.7%, 23.4%, 25.5%, 18.8% and 20.5% at The Venetian Macao, Sands Cotai Central, The Parisian Macao, The Plaza Macao and Four Seasons Hotel Macao, Sands Macao and Marina Bay Sands, respectively.

Our slot machines have produced a trailing 12-month hold percentage of 4.7%, 4.2%, 3.8%, 5.7%,

3.2% and 4.5% at The Venetian Macao, Sands Cotai Central, The Parisian Macao, The Plaza Macao and Four Seasons Hotel Macao, Sands Macao and Marina Bay Sands, respectively.

Our slot machines have produced a trailing 12-month hold percentage of 4.7%, 4.1%, 3.8%, 5.8%, 3.2% and 4.6% at The Venetian Macao, Sands Cotai Central, The Parisian Macao, The Plaza Macao and Four Seasons Hotel Macao, Sands Macao and Marina Bay Sands, respectively.

Actual win and hold percentages may vary from our expected win percentage and the trailing 12-month win and hold percentages.

Generally, slot machine play is conducted on a cash basis.

In Macao and Singapore, 26.4% and 14.7%, respectively, of our table games play was conducted on a credit basis for the six months ended June 30, 2020.

In Macao and Singapore, 28.2% and 15.2%, respectively, of our table games play was conducted on a credit basis for the nine months ended September 30, 2020.

Casino revenue measurements for the U.S.:

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Based upon our mix of table games, our table games are expected to produce a win percentage of 18% to 26% for Baccarat and 16% to 24% for non-Baccarat.

Our slot machines have produced a trailing 12-month hold percentage of 7.9% at our Las Vegas Operating Properties.

Our slot machines have produced a trailing 12-month hold percentage of 8.0%.

Actual win and hold percentages may vary from our expected win percentage and the trailing 12-month win and hold percentages.

Similar to Macao and Singapore, slot machine play is generally conducted on a cash basis.

Approximately 69.9% of our table games play at our Las Vegas Operating Properties, for the six months ended June 30, 2020, was conducted on a credit basis.

Approximately 70.8% of our table games play at our Las Vegas Operating Properties, for the nine months ended September 30, 2020, was conducted on a credit basis.

Hotel revenue measurements:

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Base rent per square foot is the weighted average base or minimum rent charge in effect at the end of the reporting period for all tenants that would qualify to be included in occupancy.

Tenant sales per square foot is the sum of reported comparable sales for the trailing 12 months divided by the comparable square footage for the same period.

Tenant sales per square foot is the sum of reported comparable sales for the trailing 12 months divided by the comparable square

footage for the same period.

Only tenants that have been open for a minimum of 12 months are included in the tenant sales per square foot calculation.

Three Months Ended June 30, 2020 Compared to the Three Months Ended June 30, 2019

Three Months Ended September 30, 2020 Compared to the Three Months Ended September 30, 2019

Summary Financial Results

Our financial results were adversely impacted by decreased visitation at our Macao operating properties and the temporary closures of Marina Bay Sands and our Las Vegas Operating Properties due to the COVID-19 Pandemic.

Our financial results were adversely impacted by decreased visitation at our properties due to the COVID-19 Pandemic, as well as properties temporarily operating at a reduced capacity due to social distancing measures.

See “COVID-19 Pandemic” for further information.

Net revenues for the three months ended June 30, 2020, decreased 97.1% to $98 million, compared to $3.33 billion for the three months ended June 30, 2019.

Operating loss was $922 million compared to operating income of $894 million for the three months ended June 30,

Net loss was $985 million for the three months ended June 30, 2020, compared to net income of $1.11 billion for the three months ended June 30, 2019.

Net revenues for the three months ended September 30, 2020, decreased 82.0% to $586 million, compared to $3.25 billion for the three months ended September 30, 2019.

Operating loss was $610 million compared to operating income of $899 million for the three months ended September 30, 2019.

Net loss was $731 million for the three months ended September 30, 2020, compared to net income of $669 million for the three months ended September 30, 2019.

Operating Revenues

Our net revenues consisted of the following:

Three Months Ended June 30,

Three Months Ended September 30,

2020 2019 Percent

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Total net revenues $ 586 $ 3,250 (82.0) %

Consolidated net revenues were $98 million for the three months ended June 30, 2020, a decrease of $3.24 billion compared to $3.33 billion for the three months ended June 30, 2019.

Consolidated net revenues were $586 million for the three months ended September 30, 2020, a decrease of $2.66 billion compared to $3.25 billion for the three months ended September 30, 2019.

The decrease was across our jurisdictions and properties with decreases of $1.94 billion, $512 million and $214 million at our Macao operations, Marina Bay Sands and our Las Vegas Operating Properties, respectively.

These decreases were driven by the COVID-19 Pandemic described above and the related reduction in visitation due to travel restrictions and the temporary closures of our Las Vegas Operating Properties and Marina Bay Sands.

Additionally, there was a $90 million decrease due to the sale of Sands Bethlehem on May 31, 2019.

Net casino revenues decreased $2.35 billion compared to the three months ended June 30, 2019.

These decreases were driven by the COVID-19 Pandemic described above and the related reduction in visitation due to travel restrictions and our properties operating at a reduced capacity due to social distancing measures.

Net casino revenues decreased $1.98 billion compared to the three months ended September 30, 2019.

The change was driven by a $1.58 billion decrease at our Macao operations, due to decreases in Non-Rolling Chip drop and Rolling Chip volume.

Marina Bay Sands decreased $461 million due to decreases in Non-Rolling Chip drop, Rolling Chip volume and slot handle.

Our Las Vegas Operating Properties decreased $98 million due to decreases in table games drop and slot handle.

These decreases were driven by the COVID-19 Pandemic described above.

Additionally, a decrease of $79 million was attributable to the sale of Sands Bethlehem on May 31, 2019.

Marina Bay Sands decreased $356 million due to decreases in Rolling Chip volume and Non-Rolling Chip drop.

Our Las Vegas Operating Properties decreased $44 million due to decreases in table games win percentage and drop and slot handle.

These decreases were driven by lower visitation across our properties due the impact of the COVID-19 Pandemic described above.

The following table summarizes the results of our casino activity:

Three Months Ended June 30,

Three Months Ended September 30,

2020 2019 Change

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Slot hold percentage 2.9 % 4.4 % (1.5) pts

Three Months Ended June 30,

2020 2019 Change

(Dollars in millions)

The Parisian Macao

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Slot hold percentage 3.1 % 3.2 % (0.1) pts

Three Months Ended September 30,

2020 2019 Change

(Dollars in millions)

Singapore Operations:

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Slot hold percentage 8.4 % 8.2 % 0.2 pts

____________________

We completed the sale of Sands Bethlehem on May 31, 2019.

In our experience, average win percentages remain fairly consistent when measured over extended periods of time with a significant volume of wagers, but can vary considerably within shorter time periods as a result of the statistical variances associated with games of chance in which large amounts are wagered.

Room revenues decreased $415 million compared to the three months ended June 30, 2019.

The decrease was primarily a result of the temporary closures of our Las Vegas Operating Properties and Marina Bay Sands.

Room revenues decreased $363 million compared to the three months ended September 30, 2019.

The decrease was primarily a result of reduced visitation across our properties as demonstrated by the reduced occupancy rates in the table below.

The Venezia Tower of our Las Vegas Operating Properties remained closed for the quarter and Marina Bay Sands reopened the first tower on July 17, 2020 and the second and third towers on August 1, 2020.

Additionally, certain rooms within Sands Cotai Central were utilized for quarantine purposes and certain rooms across our Macao properties for lodging provided to team members due to travel restrictions, driven by the COVID-19 Pandemic described above.

The following table summarizes the results of our room activity:

Three Months Ended June 30,

Three Months Ended September 30,

2020 2019 Change

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Revenue per available room (RevPAR) $ 76 $ 224 (66.1) %

____________________

We completed the sale of Sands Bethlehem on May 31, 2019.

Food and beverage revenues decreased $212 million compared to the three months ended June 30, 2019.

The decrease was primarily due to decreases of $84 million, $68 million and $56 million at our Las Vegas Operating

Properties, our Macao operating properties and Marina Bay Sands, respectively, as a result of the COVID-19 Pandemic described above.

Mall revenues decreased $124 million compared to the three months ended June 30, 2019.

The decrease was primarily due to $111 million in rent concessions granted to our mall tenants in Macao and Singapore in response to the COVID-19 Pandemic.

Food and beverage revenues decreased $145 million compared to the three months ended September 30, 2019.

The decrease was primarily due to decreases of $63 million, $43 million and $39 million at our Macao properties, our Las Vegas Operating Properties, and Marina Bay Sands, respectively, as a result of the COVID-19 Pandemic described above.

Mall revenues decreased $92 million compared to the three months ended September 30, 2019.

The decrease was primarily due to $78 million in rent concessions granted to our mall tenants in Macao and Singapore, as well as a $12 million decrease in turnover rents resulting from lower traffic in our malls resulting from the COVID-19 Pandemic.

For further information related to the financial performance of our malls, see “Additional Information Regarding our Retail Mall Operations.” The following table summarizes the results of our malls on the Cotai Strip in Macao and in Singapore:

Three Months Ended June 30,

Three Months Ended September 30,

2020 2019 Change

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__________________________

This table excludes the results of mall operations at Sands Macao and Sands Bethlehem.

This table excludes the results of our mall operations at Sands Macao.

(1) Tenant sales per square foot is the sum of reported comparable sales for the trailing 12 months divided by the comparable square footage for the same period.

(2) The Shoppes at Cotai Central will feature up to approximately 600,000 square feet of gross leasable area upon completion of all phases of Sands Cotai Central’s renovation, rebranding and expansion to The Londoner Macao.

Convention, retail and other revenues decreased $134 million compared to the three months ended June 30, 2019, driven by decreases of $53 million, $36 million and $18 million at our Las Vegas Operating Properties, our Macao operating properties and Marina Bay Sands, respectively, as a result of the COVID-19 Pandemic described above.

Additionally, our ferry operations decreased $23 million, due to the temporary closures of the Hong Kong China Ferry Terminal and the Hong Kong Macao Ferry Terminal in response to the COVID-19 Pandemic.

Convention, retail and other revenues decreased $83 million compared to the three months ended September 30, 2019, driven by decreases of $25 million, $24 million and $15 million at our Macao properties, Las Vegas Operating Properties and Marina Bay Sands, respectively, as a result of the cancellation of MICE events and decreased visitation across our properties due to the COVID-19 Pandemic described above.

Additionally, our ferry operations decreased $19 million, due to the temporary closure of the Hong Kong China Ferry Terminal in late January 2020 and the Hong Kong Macao Ferry Terminal in early February 2020 in response to the COVID-19 Pandemic.

Operating Expenses

Our operating expenses consisted of the following:

Three Months Ended June 30,

Three Months Ended September 30,

2020 2019 Percent

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Total operating expenses $ 1,196 $ 2,351 (49.1) %

Operating expenses were $1.02 billion for the three months ended June 30, 2020, a decrease of $1.42 billion compared to $2.44 billion for the three months ended June 30, 2019, primarily driven by a decrease in casino expenses of $1.09 billion.

Operating expenses were $1.20 billion for the three months ended September 30, 2020, a decrease of $1.16 billion compared to $2.35 billion for the three months ended September 30, 2019, primarily driven by a decrease in casino expenses of $927 million.

Additionally, general and administrative expenses decreased $101 million and food and beverage expenses decreased $80 million.

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Although management has implemented certain cost reduction programs, operating margins in each business segment were negatively impacted due to employee and other costs incurred during this period of decreased visitation and property closures.

We have maintained our staffing levels across our jurisdictions through the government mandated closures amid significantly reduced visitation.

The level of payroll costs during the period were reduced by $73 million in connection with the Job Support Scheme in Singapore and the Employee Retention Credit under the CARES Act in the U.S.

We have maintained our staffing levels across our jurisdictions through significantly reduced visitation.

The level of payroll costs during the period were reduced by $16 million in connection with the Job Support Scheme in Singapore and the Employee Retention Credit under the Coronavirus Aid, Relief, and Economic Security (“CARES”) Act in the U.S.

We have also implemented payroll cost saving initiatives across each of our properties, including utilization of paid time off and voluntary unpaid leave.

Casino expenses decreased $1.09 billion compared to the three months ended June 30, 2019.

The decrease was primarily attributable to a $928 million decrease in gaming taxes resulting from decreased casino revenues, as previously described.

Additionally, the sale of Sands Bethlehem in May 2019 resulted in a $51 million decrease.

Room expenses decreased $63 million compared to the three months ended June 30, 2019.

The decrease was driven by decreases of $27 million, $25 million and $10 million at our Las Vegas Operating Properties, Macao operating properties and Marina Bay Sands, respectively.

Casino expenses decreased $927 million compared to the three months ended September 30, 2019.

The decrease was primarily attributable to an $822 million decrease in gaming taxes resulting from decreased casino revenues, as previously described.

Room expenses decreased $48 million compared to the three months ended September 30, 2019.

The decrease was driven by decreases of $28 million, $12 million and $8 million at our Macao properties, Las Vegas Operating Properties and Marina Bay Sands, respectively.

These decreases are consistent with the reduction in room revenue.

Food and beverage expenses decreased $108 million compared to the three months ended June 30, 2019, due to decreases of $36 million, $35 million and $34 million at our Macao operating properties, Marina Bay Sands and our Las Vegas Operating Properties, respectively.

Food and beverage expenses decreased $80 million compared to the three months ended September 30, 2019, due to decreases of $36 million, $23 million and $21 million at our Macao properties, Marina Bay Sands and our Las Vegas Operating Properties, respectively.

These decreases are consistent with the reduction in food and beverage revenues.

Convention, retail and other expenses decreased $48 million compared to the three months ended June 30, 2019, primarily driven by a $19 million decrease in ferry expenses resulting from the closure of the ferry terminals in response to the COVID-19 Pandemic.

Additionally, there were decreases of $15 million and $8 million at our Las

Vegas Operating Properties and Macao operating properties, respectively, which were consistent with the decreases in convention, retail and other revenue discussed above.

Provision for credit losses increased $10 million compared to the three months ended June 30, 2019, primarily due to the recovery of previously reserved amounts for the three months ended June 30, 2019.

Convention, retail and other expenses decreased $38 million compared to the three months ended September 30, 2019, primarily driven by a $19 million decrease in ferry expenses resulting from the closure of the ferry terminals in response to the COVID-19 Pandemic.

Additionally, our Macao properties decreased $13 million, which is consistent with the decrease in convention, retail and other revenue discussed above.

Provision for credit losses increased $21 million compared to the three months ended September 30, 2019, primarily due to the aging of receivables for premium players at our Macao properties, as travel restrictions have limited the ability for patrons to redeem markers.

The amount of this provision can vary over short periods of time because of factors specific to the customers who owe us money from gaming activities.

We believe the amount of our provision for credit losses in the future will depend upon the state of the economy, our credit standards, our risk assessments and the judgment of our employees responsible for granting credit.

General and administrative expenses decreased $114 million compared to the three months ended June 30, 2019.

The decrease was due to decreases of $44 million, $34 million and $24 million at our Macao operating properties, Marina Bay Sands and our Las Vegas Operating Properties, respectively, primarily driven by decreases in marketing, payroll and property operations costs.

Pre-opening expenses represents personnel and other costs incurred prior to the opening of new ventures, which are expensed as incurred.

Pre-opening expenses decreased $6 million compared to the three months ended June 30, 2019, primarily due to the opening of new venues at Marina Bay Sands in the second quarter of 2019.

General and administrative expenses decreased $101 million compared to the three months ended September 30, 2019.

The decrease was due to decreases of $48 million, $27 million and $25 million at our Macao properties, our Las Vegas Operating Properties and Marina Bay Sands, respectively, primarily driven by decreases in marketing, payroll and property operations costs.

Corporate expenses decreased $26 million compared to the three months ended September 30, 2019.

The decrease was due to lower payroll expense of $12 million in the three months ended September 30, 2020 driven by lower bonus costs due to the impact of the COVID-19 Pandemic, as well as $11 million in legal costs incurred during the three months ended September 30, 2019.

Pre-opening expenses represent personnel and other costs incurred prior to the opening of new ventures, which are expensed as incurred.

Development expenses include the costs associated with our evaluation and pursuit of new business opportunities, which are also expensed as incurred.

Loss on disposal or impairment of assets increased $47 million compared to the three months ended September 30, 2019, primarily due to asset disposals and demolition costs related to The Londoner Macao.

Segment Adjusted Property EBITDA

The following table summarizes information related to our segments (see “Item 1 — Financial Statements — Notes to Condensed Consolidated Financial Statements — Note 8 — Segment Information” for discussion of our operating segments and a reconciliation of consolidated adjusted property EBITDA to net income/loss):

Three Months Ended June 30,

The following table summarizes information related to our segments (see “Item 1 — Financial Statements — Notes to Condensed Consolidated Financial Statements — Note 7 — Segment Information” for a reconciliation of consolidated adjusted property EBITDA to net income/loss):

Three Months Ended September 30,

2020 2019 Percent

5 unchanged sentences

Sands Macao (26) 52 (150.0) %

Ferry Operations and Other (6) (1) N.M.

Ferry Operations and Other (3) (3) —

(233) 755 (130.9) %

Marina Bay Sands 70 435 (83.9) %

United States:

Las Vegas Operating Properties (40) 93 (143.0) %

Sands Bethlehem (1)

— 19 (100.0) %

(122) 155 (178.7) %

Consolidated adjusted property EBITDA (1)

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__________________________

- not meaningful

(1) We completed the sale of Sands Bethlehem on May 31, 2019.

Results of operations include Sands Bethlehem through May 30, 2019.

(1) Consolidated adjusted property EBITDA, which is a non-GAAP financial measure, is used by management as the primary measure of the operating performance of our segments.

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As a result, our presentation of consolidated adjusted property EBITDA may not be directly comparable to similarly titled measures presented by other companies.

Adjusted property EBITDA at our Macao operations decreased $1.08 billion compared with the three months ended June 30, 2019, primarily due to decreased casino revenues, driven by reduced visitation from travel restrictions resulting from the COVID-19 Pandemic.

Adjusted property EBITDA at Marina Bay Sands decreased $459 million compared to the three months ended June 30, 2019, primarily due to decreased casino revenues, driven by the temporary closure of the property on April 7, 2020, resulting from the COVID-19 Pandemic.

Adjusted property EBITDA at our Las Vegas Operating Properties decreased $258 million compared to the three months ended June 30, 2019, primarily due to decreased room and casino revenues driven by the temporary closure of the property on March 18, 2020 through June 3, 2020, resulting from the COVID-19 Pandemic.

Adjusted property EBITDA at our Macao operations decreased $988 million compared with the three months ended September 30, 2019, primarily due to decreased casino revenues, driven by decreased visitation at our properties due to the COVID-19 Pandemic.

Adjusted property EBITDA at Marina Bay Sands decreased $365 million compared to the three months ended September 30, 2019, primarily due to decreased casino revenues, driven by decreased visitation at our property due to the COVID-19 Pandemic.

Adjusted property EBITDA at our Las Vegas Operating Properties decreased $133 million compared to the three months ended September 30, 2019, primarily due to no MICE events during the current quarter and decreased room and casino revenue, driven by decreased visitation to our properties and State of Nevada mandated limits on public gatherings due to the COVID-19 Pandemic.

Interest Expense

The following table summarizes information related to interest expense:

Three Months Ended June 30,

Three Months Ended September 30,

(Dollars in millions)

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Weighted average interest rate

Interest cost decreased $23 million compared to the three months ended June 30, 2019, resulting primarily from a decrease in our weighted average interest rate.

The decrease in our weighted average interest rate was primarily due to the impact of the interest rate swap hedges on $5.50 billion of our SCL Senior Notes issued in August 2018.

This decrease was partially offset by an increase in the weighted average total debt balance, due to the issuance of the 2026 and 2030 SCL Senior Notes issued on June 4, 2020, in addition to the LVSC Senior Note issued on November 25, 2019.

Interest cost increased $4 million compared to the three months ended September 30, 2019, resulting from an increase in our weighted average total debt balance, due to the issuance of the 2026 and 2030 SCL Senior Notes issued on June 4, 2020 and the LVSC Senior Note issued on November 25, 2019.

This increase was partially offset by a decrease in our weighted average interest rate primarily due to the benefit of $13 million in the current quarter compared to the benefit of $7 million in the same quarter of the previous year due to the interest rate swap agreements on $5.50 billion of our SCL Senior Notes issued in August 2018.

Other Factors Affecting Earnings

Other expense was $3 million for the three months ended June 30, 2020, compared to other income of $20 million for the three months ended June 30, 2019.

The change from the prior year period was due primarily to a $21 million decrease in foreign currency transaction gains driven by the impact of foreign currency exchange rate increase of 312 basis points on U.S.

dollar denominated debt held by Sands China Ltd.

and a $7 million increase in foreign currency transaction losses driven by the impact of the foreign currency exchange rate decrease of 282 basis points on Singapore dollar denominated intercompany debt reported in U.S.

Our income tax benefit was $54 million on a loss before income taxes of $1.04 billion for the three months ended June 30, 2020.

This compares to a 17.6% effective income tax rate for the three months ended June 30, 2019.

The effective income tax rate for the three months ended June 30, 2019, would have been 9.6% without the discrete income tax expense of $161 million resulting from the sale of Sands Bethlehem.

The income tax benefit for the three months ended June 30, 2020, reflects a 17% statutory tax rate on our Singapore operations, a 21% corporate income tax on our domestic operations and a zero percent tax rate on our Macao gaming operations due to our income tax exemption in Macao.

Other expense was $4 million for the three months ended September 30, 2020, compared to $7 million for the three months ended September 30, 2019.

The decrease was primarily due to an $18 million decrease in foreign transaction losses driven by the impact of foreign currency exchange rate decrease of 261 basis points on U.S.

dollar denominated debt held by SCL.

This was partially offset by a $12 million decrease in foreign currency transaction

gains driven by the impact of the foreign currency exchange rate decrease of 530 basis points on Singapore dollar denominated intercompany debt reported in U.S.

Our income tax benefit was $17 million on a loss before income taxes of $748 million for the three months ended September 30, 2020.

This compares to a 10.9% effective income tax rate for the three months ended September 30, 2019.

The income tax benefit for the three months ended September 30, 2020, reflects a 17% statutory tax rate on our Singapore operations, a 21% corporate income tax on our domestic operations and a zero percent tax rate on our Macao gaming operations due to our income tax exemption in Macao.

Our Singapore and U.S.

operations recorded tax benefits associated with the pre-tax book losses incurred during the three months ended June 30, 2020.

operations recorded tax benefits associated with the pre-tax book losses incurred during the three months ended September 30, 2020.

tax benefit was partially offset by a valuation allowance recorded on certain U.S.

foreign tax credits, which we no longer expect to utilize due to lower royalty income resulting from a decrease in revenues from Macao and Singapore compared to prior estimates.

The net loss attributable to our noncontrolling interests was $165 million for the three months ended June 30, 2020, compared to a net income attributable to our noncontrolling interests of $154 million for the three months ended June 30, 2019.

These amounts primarily related to the noncontrolling interest of SCL.

Six Months Ended June 30, 2020 Compared to the Six Months Ended June 30, 2019

Our Macao non-gaming operations had a non-cash discrete income tax expense of $14 million due to the reversal of certain deferred tax assets related to fixed assets, which were primarily disposed of as part of The Londoner Macao project.

The net loss attributable to our noncontrolling interests was $166 million for the three months ended September 30, 2020, compared to a net income attributable to our noncontrolling interests of $136 million for the three months ended September 30, 2019.

These amounts are related to the noncontrolling interest of SCL.

Nine Months Ended September 30, 2020 Compared to the Nine Months Ended September 30, 2019

Summary Financial Results

Our financial results were adversely impacted by temporary closures and decreased visitation at each of our operating properties due to the COVID-19 Pandemic.

Our financial results were adversely impacted by decreased visitation at each of our operating properties due to the COVID-19 Pandemic.

See “COVID-19 Pandemic” for further information.

Net revenues for the six months ended June 30, 2020, was $1.88 billion, compared to $6.98 billion for the six months ended June 30, 2019.

Operating loss was $867 million compared to operating income of $1.87 billion for the six months ended June 30, 2019.

Net loss was $1.04 billion for the six months ended June 30, 2020, compared to net income of $1.85 billion for the six months ended June 30, 2019.

Net revenues for the nine months ended September 30, 2020, was $2.47 billion, compared to $10.23 billion for the nine months ended September 30, 2019.

Operating loss was $1.48 billion compared to operating income of $2.76 billion for the nine months ended September 30, 2019.

Net loss was $1.77 billion for the nine months ended September 30, 2020, compared to net income of $2.52 billion for the nine months ended September 30, 2019.

Operating Revenues

Our net revenues consisted of the following:

Six Months Ended June 30,

Nine Months Ended September 30,

2020 2019 Percent

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Total net revenues $ 2,466 $ 10,230 (75.9) %

Consolidated net revenues were $1.88 billion for the six months ended June 30, 2020, a decrease of $5.10 billion compared to $6.98 billion for the six months ended June 30, 2019, due to decreases of $3.62 billion, $821 million and $433 million at our Macao operations, Marina Bay Sands and our Las Vegas Operating Properties, respectively.

The decreases were driven by decreased visitation and property closures as a result of the COVID-19 Pandemic, as described above.

Consolidated net revenues were $2.47 billion for the nine months ended September 30, 2020, a decrease of $7.76 billion compared to $10.23 billion for the nine months ended September 30, 2019, due to decreases of $5.56 billion, $1.33 billion and $647 million at our Macao operations, Marina Bay Sands and our Las Vegas Operating Properties, respectively.

The decreases were driven by decreased visitation and temporary property closures as a result of the COVID-19 Pandemic, as described above.

Additionally, there was a $227 million decrease due to the sale of Sands Bethlehem on May 31, 2019.

Net casino revenues decreased $3.84 billion compared to the six months ended June 30, 2019.

The decrease was primarily attributable to decreases of $2.96 billion and $566 million at our Macao operations and Marina Bay Sands, respectively, mainly driven by decreases in Non-Rolling Chip drop and Rolling Chip volume due to decreases in visitation at our Macao properties and the closure of Marina Bay Sands during the quarter ended June 30, 2020 as result of the COVID-19 Pandemic described above.

Our Las Vegas operating properties decreased $109 million due to decreases in table game drop and slot handle as the property was closed for a portion of the six months ended June 30, 2020, as a result of the COVID-19 Pandemic described above.

Net casino revenues decreased $5.82 billion compared to the nine months ended September 30, 2019, driven by temporary property closures and decreased visitation once our properties reopened as a result of the COVID-19 Pandemic described above.

In addition, casinos at each of our properties continue to operate at a reduced capacity due to social distancing measures.

Revenues at our Macao operations and Marina Bay Sands decreased $4.54 billion and $922 million, respectively, driven by decreases in Non-Rolling Chip drop and Rolling Chip volume, while our Las Vegas Operating Properties decreased $153 million due to decreases in table games drop and win percentage and slot handle.

Additionally, there was a decrease of $199 million attributable to the sale of Sands Bethlehem on May 31, 2019.

The following table summarizes the results of our casino activity:

Six Months Ended June 30,

Nine Months Ended September 30,

2020 2019 Change

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Slot hold percentage 3.7 % 3.7 % — pts

Six Months Ended June 30,

Nine Months Ended September 30,

2020 2019 Change

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We completed the sale of Sands Bethlehem on May 31, 2019.

Room revenues decreased $597 million compared to the six months ended June 30, 2019.

The decrease was primarily a result of the temporary closures of our Las Vegas Operating Properties and Marina Bay Sands.

Room revenues decreased $960 million compared to the nine months ended September 30, 2019.

The decrease was primarily a result of temporary property closures and decreased visitation at each of our properties, due to the COVID-19 Pandemic.

Additionally, certain rooms within Sands Cotai Central and Marina Bay Sands were utilized for quarantine purposes and certain rooms across our Macao properties for lodging were used by team members due to travel restrictions.

The following table summarizes the results of our room activity:

Six Months Ended June 30,

Nine Months Ended September 30,

2020 2019 Change

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We completed the sale of Sands Bethlehem on May 31, 2019.

Food and beverage revenues decreased $305 million compared to the six months ended June 30, 2019.

The decrease was mainly due to decreases of $127 million, $99 million and $68 million at our Macao operating

properties, our Las Vegas Operating Properties and Marina Bay Sands, respectively, as a result of the COVID-19 Pandemic described above.

Mall revenues decreased $181 million compared to the six months ended June 30, 2019.

The decrease was primarily due to $170 million in rent concessions granted to our mall tenants in Macao and Singapore in response to the COVID-19 Pandemic.

Food and beverage revenues decreased $450 million compared to the nine months ended September 30, 2019.

The decrease was mainly due to decreases of $190 million, $142 million and $107 million at our Macao properties,

our Las Vegas Operating Properties and Marina Bay Sands, respectively, as a result of the COVID-19 Pandemic described above.

Mall revenues decreased $273 million compared to the nine months ended September 30, 2019.

The decrease was primarily due to $248 million in rent concessions granted to our mall tenants in Macao and Singapore and a decrease of $25 million in turnover rents resulting from lower traffic in our malls resulting from the COVID-19 Pandemic.

Six Months Ended June 30, (1)

Nine Months Ended September 30, (1)

2020 2019 Change

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__________________________

This table excludes the results of our mall operations at Sands Macao and Sands Bethlehem.

(1) As GLA, occupancy, base rent per square foot and tenant sales per square foot are calculated as of June 30, 2020 and 2019, they are identical to the summary presented herein for the three months ended June 30, 2020 and 2019, respectively.

This table excludes the results of our mall operations at Sands Macao and Sands Bethlehem, the sale of which was completed on May 31, 2019.

(1) As GLA, occupancy, base rent per square foot and tenant sales per square foot are calculated as of September 30, 2020 and 2019, they are identical to the summary presented herein for the three months ended September 30, 2020 and 2019, respectively.

(2) Tenant sales per square foot is the sum of reported comparable sales for the trailing 12 months divided by the comparable square footage for the same period.

(3) The Shoppes at Cotai Central will feature up to approximately 600,000 square feet of gross leasable area upon completion of all phases of Sands Cotai Central’s renovation, rebranding and expansion to The Londoner Macao.

Convention, retail and other revenues decreased $182 million compared to the six months ended June 30, 2019 driven by decreases of $56 million, $48 million and $27 million at our Macao operating properties, Las Vegas Operating Properties and Marina Bay Sands, respectively, as a result of the COVID-19 Pandemic described above.

Convention, retail and other revenues decreased $265 million compared to the nine months ended September 30, 2019 driven by decreases of $82 million, $72 million, and $42 million at our Macao properties, Las Vegas Operating Properties and Marina Bay Sands, respectively, as a result of the cancellation of MICE events and decreased visitation across our properties due to the COVID-19 Pandemic described above.

Additionally, there was a $60 million decrease related to our ferry operations, due to the temporary closure of the Hong Kong China Ferry Terminal in late January 2020 and the Hong Kong Macao Ferry Terminal in early February 2020 in response to the COVID-19 Pandemic.

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Our operating expenses consisted of the following:

Six Months Ended June 30,

Nine Months Ended September 30,

2020 2019 Percent

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Total operating expenses $ 3,943 $ 7,466 (47.2) %

Operating expenses were $2.75 billion for the six months ended June 30, 2020, a decrease of $2.37 billion compared to $5.12 billion for the six months ended June 30, 2019.

Operating expenses were $3.94 billion for the nine months ended September 30, 2020, a decrease of $3.52 billion compared to $7.47 billion for the nine months ended September 30, 2019.

The decrease was primarily driven by a $2.75 billion decrease in casino expenses.

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We have also implemented payroll cost saving initiatives across each of our properties, including utilization of paid time off and voluntary unpaid leave.

Casino expenses decreased $1.82 billion compared to the six months ended June 30, 2019.

Casino expenses decreased $2.75 billion compared to the nine months ended September 30, 2019.

The decrease was primarily attributable to a decrease of $2.37 billion in gaming taxes due to decreased casino revenues, as previously described.

Additionally, the sale of Sands Bethlehem in May 2019 resulted in a $127 million decrease.

Room expenses decreased $81 million compared to the six months ended June 30, 2019.

The decrease was driven by decreases of $39 million, $29 million and $11 million at our Macao operating properties, our Las Vegas Operating Properties and Marina Bay Sands, respectively.

Room expenses decreased $129 million compared to the nine months ended September 30, 2019.

The decrease was driven by decreases of $67 million, $41 million and $19 million at our Macao properties, our Las Vegas Operating Properties and Marina Bay Sands, respectively.

These decreases are consistent with the reduction in room revenue.

Food and beverage expenses decreased $147 million compared to the six months ended June 30, 2019, due to decreases of $66 million, $36 million and $36 million at our Macao operating properties, Marina Bay Sands and our Las Vegas Operating Properties, respectively.

Food and beverage expenses decreased $227 million compared to the nine months ended September 30, 2019, due to decreases of $102 million, $59 million and $57 million at our Macao properties, Marina Bay Sands and our Las Vegas Operating Properties, respectively.

These decreases are consistent with the reduction in food and beverage revenues.

Convention, retail and other expenses decreased $72 million compared to the six months ended June 30, 2019 driven by a decrease of $35 million related to the closure of the ferry terminals previously described.

Additionally, our Macao operating properties, Las Vegas Operating Properties and Marina Bay Sands decreased $15 million, $13 million and $7 million, respectively, as a result of the COVID-19 Pandemic described above.

The provision for credit losses was $35 million for the six months ended June 30, 2020, compared to $11 million for the six months ended June 30, 2019.

The increase resulted from increased collections of previously reserved customer balances during the six months ended June 30, 2019.

Convention, retail and other expenses decreased $110 million compared to the nine months ended September 30, 2019 driven by a decrease of $53 million related to the closure of the ferry terminals previously described.

Additionally, our Macao properties, Las Vegas Operating Properties and Marina Bay Sands decreased $27 million, $17 million and $11 million, respectively, as a result of the COVID-19 Pandemic described above.

The provision for credit losses was $60 million for the nine months ended September 30, 2020, compared to $15 million for the nine months ended September 30, 2019.

The increase was driven by the aging of receivables for premium players at our Macao properties during 2020, as travel restrictions have limited the ability for patrons to redeem markers.

The amount of this provision can vary over short periods of time because of factors specific to the customers who owe us money from gaming activities at any given time.

General and administrative expenses decreased $164 million compared to the six months ended June 30, 2019 due to decreases of $68 million, $38 million and $27 million at our Macao operating properties, Marina Bay Sands and our Las Vegas Operating Properties, respectively.

General and administrative expenses decreased $265 million compared to the nine months ended September 30, 2019 due to decreases of $116 million, $62 million and $54 million at our Macao properties, Marina Bay Sands and our Las Vegas Operating Properties, respectively.

The decreases were primarily driven by decreases in marketing, payroll and property operations costs.

Additionally, the sale of Sands Bethlehem in May 2019 resulted in a $33 million decrease.

Corporate expenses decreased $91 million compared to the six months ended June 30, 2019.

The decrease was primarily due to a nonrecurring legal settlement during the six months ended June 30, 2019.

Pre-opening expenses represents personnel and other costs incurred prior to the opening of new ventures, which are expensed as incurred.

Pre-opening expenses decreased $5 million compared to the six months ended June 30, 2019, primarily due to the opening of new venues at Marina Bay Sands in the second quarter of 2019.

Corporate expenses decreased $117 million compared to the nine months ended September 30, 2019.

The decrease was primarily due to a nonrecurring legal settlement during the nine months ended September 30, 2019.

Pre-opening expenses represent personnel and other costs incurred prior to the opening of new ventures, which are expensed as incurred.

Development expenses include the costs associated with our evaluation and pursuit of new business opportunities, which are also expensed as incurred.

Loss on disposal or impairment of assets increased $50 million compared to the nine months ended September 30, 2019, primarily due to asset disposals and demolition costs related to The Londoner Macao.

Segment Adjusted Property EBITDA

Six Months Ended June 30,

Nine Months Ended September 30,

2020 2019 Percent

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Results of operations include Sands Bethlehem through May 30, 2019.

Adjusted property EBITDA at our Macao operations decreased $1.87 billion compared to the six months ended June 30, 2019, primarily due to decreased casino revenues driven by government mandated travel restrictions, property closures and overall reduced visitation since late January 2020 resulting from the COVID-19 Pandemic.

Adjusted property EBITDA at Marina Bay Sands decreased $600 million compared to the six months ended June 30, 2019.

The decrease was primarily due to decreased casino revenues, driven by the temporary closure of the property on April 7, 2020, resulting from the COVID-19 Pandemic.

Adjusted property EBITDA at our Las Vegas Operating Properties decreased $308 million compared to the six months ended June 30, 2019.

The decrease was primarily due to decreased room and casino revenues driven by the temporary closure of the property on March 18, 2020, resulting from the COVID-19 Pandemic.

Adjusted property EBITDA at our Macao operations decreased $2.86 billion compared to the nine months ended September 30, 2019, primarily due to decreased casino revenues driven by government mandated travel restrictions, property closures and overall reduced visitation since late January 2020 resulting from the COVID-19 Pandemic.

Adjusted property EBITDA at Marina Bay Sands decreased $965 million compared to the nine months ended September 30, 2019.

The decrease was primarily due to decreased casino revenues, driven by the temporary closure of the property and reduced visitation resulting from the COVID-19 Pandemic.

Adjusted property EBITDA at our Las Vegas Operating Properties decreased $441 million compared to the nine months ended September 30, 2019.

The decrease was primarily due to no MICE events in the second and third quarters of 2020 and decreased room and casino revenues driven by the temporary closure of the properties and overall reduced visitation, resulting from the COVID-19 Pandemic.

Interest Expense

The following table summarizes information related to interest expense:

Six Months Ended June 30,

Nine Months Ended September 30,

(Dollars in millions)

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Weighted average interest rate

Interest cost decreased $30 million compared to the six months ended June 30, 2019, resulting primarily from a decrease in our weighted average interest rate.

The decrease was primarily due to the impact of the interest rate swap hedges on $5.50 billion of our SCL Senior Notes issued in August 2018.

This was partially offset by an increase in the weighted average total debt balance, due to the issuance of the 2025 LVSC Senior Notes on November 25, 2019.

Additionally, the 2026 and 2030 SCL Senior Notes were issued on June 4, 2020.

Interest cost decreased $26 million compared to the nine months ended September 30, 2019, resulting primarily from a decrease in our weighted average interest rate.

The decrease was primarily due to the increased benefit of $41 million over the prior year due to the interest rate swap agreements on $5.50 billion of our SCL Senior Notes issued in August 2018.

This was partially offset by an increase in the weighted average total debt balance due to the issuance of the 2025 LVSC Senior Notes on November 25, 2019 and the 2026 and 2030 SCL Senior Notes issued on June 4, 2020.

Other Factors Affecting Earnings

Other income was $34 million for the six months ended June 30, 2020, compared to other expense of $1 million for the six months ended June 30, 2019.

The change from the prior year period was due primarily to increases of $21 million in foreign currency transaction gains from the impact of foreign currency exchange rate increase of 578 basis points on Singapore dollar denominated intercompany debt reported in U.S.

dollars and $16 million from the impact of foreign currency exchange rate decrease of 228 basis points on U.S.

dollar denominated debt held by Sands China Ltd.

Our income tax benefit was $29 million on a loss before income taxes of $1.07 billion for the six months ended June 30, 2020.

This compares to a 14.8% effective income tax rate for the six months ended June 30, 2019.

The effective income tax rate for the six months ended June 30, 2019, would have been 9.9% without the discrete income tax expense of $161 million resulting from the sale of Sands Bethlehem.

The income tax benefit for the six months ended June 30, 2020, reflects a 17% statutory tax rate on our Singapore operations, a 21% corporate income tax on our domestic operations and a zero percent tax rate on our Macao gaming operations due to our income tax exemption in Macao.

Other income was $30 million for the nine months ended September 30, 2020, compared to other expense of $8 million for the nine months ended September 30, 2019.

The change from prior period was due primarily to a $34 million decrease in foreign transaction losses driven by the impact of foreign currency exchange rate decrease of 488 basis points on U.S.

dollar denominated debt held by SCL and a $9 million decrease in foreign currency transaction losses driven by the impact of the foreign currency exchange rate increase of 48 basis points on Singapore dollar denominated intercompany debt reported in U.S.

Our income tax benefit was $46 million on a loss before income taxes of $1.81 billion for the nine months ended September 30, 2020.

This compares to a 13.8% effective income tax rate for the nine months ended September 30, 2019.

The effective income tax rate for the nine months ended September 30, 2019, would have been 10.2% without the discrete income tax expense of $161 million resulting from the sale of Sands Bethlehem.

The income tax benefit for the nine months ended September 30, 2020, reflects a 17% statutory tax rate on our Singapore operations, a 21% corporate income tax on our domestic operations and a zero percent tax rate on our Macao gaming operations due to our income tax exemption in Macao.

Our Singapore and U.S.

operations recorded tax benefits associated with the pre-tax book losses incurred during the six months ended June 30, 2020.

operations recorded tax benefits associated with the pre-tax book losses incurred during the nine months ended September 30, 2020.

tax benefit was partially offset by a valuation allowance recorded on certain U.S.

foreign tax credits, which we no longer expect to utilize due to lower royalty income resulting from a decrease in revenues from Macao and Singapore compared to prior estimates.

The net loss attributable to our noncontrolling interests was $215 million for the six months ended June 30, 2020, compared to net income attributable to our noncontrolling interest of $316 million for the six months ended June 30, 2019.

The net loss attributable to our noncontrolling interests was $381 million for the nine months ended September 30, 2020, compared to net income attributable to our noncontrolling interest of $452 million for the nine months ended September 30, 2019.

These amounts were primarily related to the noncontrolling interest of SCL.

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We generate our mall revenues primarily from leases with tenants through minimum base rents, overage rents, and reimbursements for common area maintenance (“CAM”) and other expenditures.

The following tables summarize the results of our mall operations on the Cotai Strip and at Marina Bay Sands for the three and six months ended June 30, 2020 and 2019:

The following tables summarize the results of our mall operations on the Cotai Strip and at Marina Bay Sands for the three and nine months ended September 30, 2020 and 2019:

Venetian Shoppes at

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(In millions)

For the three months ended June 30, 2020

For the three months ended September 30, 2020

Mall revenues:

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$ 2 $ 1 $ 2 $ — $ 5

For the three months ended June 30, 2019

For the three months ended September 30, 2019

Mall revenues:

10 unchanged sentences

Property taxes (3)

Recovery of credit losses

Mall-related expenses (4)

5 unchanged sentences

(In millions)

For the six months ended June 30, 2020

For the nine months ended September 30, 2020

Mall revenues:

17 unchanged sentences

$ 13 $ 4 $ 7 $ 5 $ 14

For the six months ended June 30, 2019

For the nine months ended September 30, 2019

Mall revenues:

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To date, The Venetian Macao, The Plaza Macao and Four Seasons Hotel Macao, Sands Cotai Central and The Parisian Macao have obtained a second exemption.

The exemption for The Venetian Macao expired in August 2019 and the exemption for The Plaza Macao and Four Seasons Hotel Macao, Sands Cotai Central and The Parisian Macao will be expiring in August 2020, December 2027 and September 2028, respectively.

The exemption for The Venetian Macao and The Plaza Macao and Four Seasons Hotel Macao expired in August 2019 and August 2020, respectively, and the exemption for Sands Cotai Central and The Parisian Macao will be expiring in December 2027 and September 2028, respectively.

(4) Mall-related expenses consist of CAM, marketing fees and other direct operating expenses, property taxes and provision for credit losses, but excludes depreciation and amortization and general and administrative costs.

It is common in the mall operating industry for companies to disclose mall net operating income (“NOI”) as a useful supplemental measure of a mall’s operating performance.

measure that, when compared year over year, reflects the revenues and expenses directly associated with owning and operating commercial real estate properties and the impact on operations from trends in occupancy rates, rental rates and operating costs.

Because NOI excludes general and administrative expenses, interest expense, impairment losses, depreciation and amortization, gains and losses from property dispositions, allocations to noncontrolling interests and provision for income taxes, it provides a performance measure that, when compared year over year, reflects the revenues and expenses directly associated with owning and

operating commercial real estate properties and the impact on operations from trends in occupancy rates, rental rates and operating costs.

In the tables above, we believe taking total mall revenues less mall-related expenses provides an operating performance measure for our malls.

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The Londoner Macao will feature new attractions and features internally and externally from London, including some of London’s most recognizable landmarks, such as the Houses of Parliament and Big Ben.

The expanded retail areas will be rebranded to the Shoppes at Londoner and we will add new food and beverage venues.

We will add approximately 370 luxury suites in the Londoner Court, and the prior Holiday Inn-branded rooms and suites are being converted to approximately 600 London-themed suites, referred to as The Londoner Hotel.

We will add approximately 370 luxury suites in the Londoner Court, and the prior Holiday Inn-branded rooms and suites were converted to approximately 600 London-themed suites, referred to as The Londoner Hotel.

We are utilizing suites as they are completed on a simulation basis for trial and feedback purposes.

We expect the Londoner Court to be completed in late 2020 and The Londoner Macao project to be completed in phases throughout 2020 and 2021.

A number of new restaurants will open progressively from late 2020 and our retail offerings will be expanded and rebranded as the Shoppes at Londoner.

Construction work on the conversion of Sands Cotai Central into the new integrated resort The Londoner Macao is progressing.

We expect the Londoner Court suites to be completed in late 2020 and overall The Londoner Macao project to be delivered in phases throughout 2020 and 2021.

Construction of The Grand Suites at Four Seasons is now complete and features 289 additional luxury suites.

We have initiated approved gaming operations in this space and are utilizing suites on a simulation basis for trial and feedback purposes.

We initiated approved gaming operations in this space in the first quarter of 2020 and recently obtained the hotel license for The Grand Suites at Four Seasons.

We anticipate the total costs associated with these development projects to be approximately $2.2 billion.

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In April 2019, our wholly owned subsidiary, Marina Bay Sands Pte.

(“MBS”) and the Singapore Tourism Board (the “STB”) entered into the Development Agreement pursuant to which MBS will construct a development, the MBS Expansion Project, which will include a hotel tower with a rooftop attraction, convention and meeting facilities and a state-of-the-art live entertainment arena with approximately 15,000 seats.

The Development Agreement provides for a total project cost of approximately SGD 4.5 billion (approximately $3.2 billion at exchange rates in effect on June 30, 2020).

(“MBS”) and the Singapore Tourism Board (the “STB”) entered into a development agreement (the “Development Agreement”) pursuant to which MBS will construct a development, the MBS Expansion Project, which will include a hotel tower with a rooftop attraction, convention and meeting facilities and a state-of-the-art live entertainment arena with approximately 15,000 seats.

The Development Agreement provides for a total project cost of approximately SGD 4.5 billion (approximately $3.3 billion at exchange rates in effect on September 30, 2020).

The amount of the total project cost will be finalized as we complete design and development and begin construction.

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Our cash flows consisted of the following:

Six Months Ended June 30,

Nine Months Ended September 30,

(In millions)

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Our rooms, food and beverage and other non-gaming revenues are conducted primarily on a cash basis or as a trade receivable, resulting in operating cash flows being generally affected by changes in operating income and accounts receivable.

Net cash generated from operating activities for the six months ended June 30, 2020, decreased $1.92 billion compared to the six months ended June 30, 2019.

The main factor driving this decrease was the impact of the COVID-19 Pandemic on our operations, which significantly reduced visitation to our properties and caused the temporary shutdown of all of our properties at various times during the first six months of 2020 as described above.

Net cash generated from operating activities for the nine months ended September 30, 2020, decreased $3.11 billion compared to the nine months ended September 30, 2019.

We had a cash usage for operations in 2020 of $1.32 billion due to limited revenues.

The COVID-19 Pandemic impacted our working capital, which was a cash outflow during the six months ended June 30, 2020 as the amount of receivables collected was less than the settlement of operating accrued liabilities and a reduction to patron deposits and outstanding chips.

In addition, the $896 million of cash flow from operations in the prior year were impacted by the land lease payment made in 2019 in connection with the MBS Expansion Project.

The COVID-19 Pandemic impacted our working capital, which was a cash outflow during the nine months ended September 30, 2020 as the amount of receivables collected was less than the settlement of operating accrued liabilities and a reduction to outstanding chips.

In addition, the $1.80 billion of cash flow from operations in the prior year were impacted by the land lease payment made in 2019 in connection with the MBS Expansion Project.

Cash Flows — Investing Activities

Capital expenditures for the six months ended June 30, 2020, totaled $702 million, including $578 million for construction and development activities in Macao, which consisted primarily of $374 million for Sands Cotai Central related primarily to The Londoner Macao, $129 million for The Plaza Macao and Four Seasons Hotel Macao related primarily to the Grand Suites at Four Seasons Macao and $66 million for The Venetian Macao;

$61 million at Marina Bay Sands in Singapore;

Capital expenditures for the nine months ended September 30, 2020, totaled $1.08 billion.

Included in this amount was $857 million for construction and development activities in Macao, which consisted primarily of $591 million for Sands Cotai Central related primarily to The Londoner Macao, $147 million for The Plaza Macao and Four Seasons Hotel Macao related primarily to the Grand Suites at Four Seasons Macao and $103 million for The Venetian Macao.

Additionally, this amount included $137 million at Marina Bay Sands in Singapore;

$80 million at our Las Vegas Operating Properties;

and $4 million for corporate and other.

Capital expenditures for the six months ended June 30, 2019, totaled $453 million, including $227 million for construction and development activities in Macao, which consisted primarily of $109 million for Sands Cotai Central related primarily to the Londoner Macao, $60 million for The Plaza Macao and Four Seasons Hotel Macao

related primarily to the Grand Suites at Four Seasons Macao, $38 million for The Venetian Macao and $14 million for The Parisian Macao;

$98 million at Marina Bay Sands in Singapore;

Capital expenditures for the nine months ended September 30, 2019, totaled $756 million.

Included in this amount was $410 million for construction and development activities in Macao, which consisted primarily of $178 million for Sands Cotai Central related primarily to the Londoner Macao, $125 million for The Plaza Macao and

Four Seasons Hotel Macao related primarily to the Grand Suites at Four Seasons Macao, $75 million for The Venetian Macao and $21 million for The Parisian Macao.

Additionally, this amount included $134 million at Marina Bay Sands in Singapore;

$153 million at our Las Vegas Operating Properties;

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Cash Flows — Financing Activities

Net cash flows used in financing activities were $547 million for the six months ended June 30, 2020, which was primarily attributable to $911 million in dividend payments and net proceeds of $1.46 billion on our various credit facilities, driven by the issuance of $1.50 billion of unsecured notes at SCL.

Net cash flows used in financing activities were $2.19 billion for the six months ended June 30, 2019, which was primarily attributable to $1.82 billion in dividend payments, $354 million in common stock repurchases and net repayments of $51 million on our various credit facilities.

Net cash flows generated from financing activities w ere $575 million for the nine months ended September 30, 2020, which was primarily attributable to net proceeds of $1.49 billion on our various credit facilities, driven by the issuance of $1.50 billion of unsecured notes at SCL, partially offset by $911 million in dividend payments.

Net cash flows used in financing activities were $2.97 billion for the nine months ended September 30, 2019, which was primarily attributable to $2.41 billion in dividend payments, $454 million in common stock repurchases, $127 million in payments of financing costs and net repayments of $18 million on our various credit facilities.

Capital Financing Overview

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Our U.S., SCL and Singapore credit facilities, as amended, contain various financial covenants, which include maintaining a maximum leverage ratio or net debt, as defined, to trailing twelve-month adjusted earnings before interest, income taxes, depreciation and amortization, as defined.

In September 2020, LVSC entered into an amendment, pursuant to which lenders, among other things, removed LVSC’s requirement to maintain a maximum leverage ratio as of the last day of the fiscal quarter during the period beginning on October 31, 2020, through and including December 31, 2021.

In March 2020, SCL entered into a waiver and amendment request letter, pursuant to which lenders, among other things, waived SCL’s requirement to ensure the maximum leverage ratio does not exceed 4.0x for any period beginning on, and including, January 1, 2020 and ending on, and including, July 1, 2021 (other than with respect to the financial year ended December 31, 2019).

In September 2020, SCL entered into a waiver extension and amendment request letter, pursuant to which the aforementioned waiver period was extended to January 1, 2022.

In June 2020, MBS entered into an amendment letter, such that MBS will not have to comply with the leverage or interest coverage covenants for the financial quarters ending, and including, September 30, 2020 through, and including, December 31, 2021.

As of June 30, 2020, our U.S.

and Singapore leverage ratios, as defined per the respective credit facility agreements were 1.4x and 2.9x compared to the maximum leverage ratios allowed of 4.0x and 4.5x, respectively.

We held unrestricted cash and cash equivalents of approximately $3.02 billion and restricted cash and cash equivalents of approximately $16 million as of June 30, 2020, of which approximately $1.79 billion of the unrestricted amount is held by non-U.S.

As of September 30, 2020, our U.S.

leverage ratio, as defined per the respective credit facility agreement, was 2.9x compared to the maximum leverage ratio allowed of 4.0x.

We held unrestricted cash and cash equivalents of approximately $2.38 billion and restricted cash and cash equivalents of approximately $17 million as of September 30, 2020, of which approximately $1.36 billion of the unrestricted amount is held by non-U.S.

subsidiaries.

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subsidiaries are not available for repatriation primarily due to dividend requirements to third-party public stockholders in the case of funds being repatriated from SCL.

We believe the cash on hand and cash flow generated from operations, as well as the $3.94 billion available for borrowing under our U.S., SCL and Singapore revolving credit facilities, net of outstanding letters of credit, and SGD 3.75 billion (approximately $2.69 billion at exchange rates in effect on June 30, 2020) under our Singapore Delayed Draw Term Facility as of June 30, 2020, will be sufficient to maintain compliance with the financial covenants of our credit facilities and fund our working capital needs, committed and planned capital expenditures, development opportunities and debt obligations.

We believe the cash on hand and cash flow generated from operations, as well as the $3.95 billion available for borrowing under our U.S., SCL and Singapore revolving credit facilities, net of outstanding letters of credit, and SGD 3.69 billion (approximately $2.69 billion at exchange rates in effect on September 30, 2020) under our Singapore Delayed Draw Term Facility as of September 30, 2020, will be sufficient to maintain compliance with the financial covenants of our credit facilities and fund our working capital needs, committed and planned capital expenditures, development opportunities and debt obligations.

In the normal course of our activities, we will continue to evaluate global capital markets to consider future opportunities for enhancements of our capital structure.

On February 21, 2020 SCL paid a dividend of 0.99 Hong Kong dollars (“HKD”) to SCL stockholders (a total of $1.03 billion, of which we retained $717 million during the six months ended June 30, 2020).

On March 26, 2020, we paid a quarterly dividend of $0.79 per common share as part of a regular cash dividend program and, during the six months ended June 30, 2020, recorded $603 million as a distribution against retained earnings.

On February 21, 2020, SCL paid a dividend of 0.99 Hong Kong dollars (“HKD”) to SCL stockholders (a total of $1.03 billion, of which we retained $717 million during the nine months ended September 30, 2020).

On March 26, 2020, we paid a quarterly dividend of $0.79 per common share as part of a regular cash dividend program and, during the nine months ended September 30, 2020, recorded $603 million as a distribution against retained earnings.

We have suspended our quarterly dividend program and SCL did not pay a final dividend for 2019 due to the impact of the COVID-19 Pandemic.

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We have taken various mitigating measures to manage through the current environment, including a cost and capital expenditure reduction program to minimize cash outflow of non-essential items.

In June 2018, our Board of Directors authorized the repurchase of $2.50 billion of our outstanding common stock, which was to expire in November 2020.

In October 2020, our Board of Directors authorized the extension of the expiration date of the remaining repurchase amount of $916 million to November 2022.

As of September 30, 2020, we have remaining authorization to repurchase $916 million of our outstanding common shares.

Repurchases of our common stock are made at our discretion in accordance with applicable federal securities laws in the open market or otherwise.

The timing and actual number of shares to be repurchased in the future will depend on a variety of factors, including our financial position, earnings, legal requirements, other investment opportunities and market conditions.

Aggregate Indebtedness and Other Contractual Obligations

As of June 30, 2020, there had been no material changes to our aggregated indebtedness and other contractual obligations previously reported in our Annual Report on Form 10-K for the year ended December 31, 2019, with the exception of the issuance of the 2026 and 2030 SCL Senior Notes.

As of September 30, 2020, there had been no material changes to our aggregated indebtedness and other contractual obligations previously reported in our Annual Report on Form 10-K for the year ended December 31, 2019, with the exception of the issuance of the 2026 and 2030 SCL Senior Notes and the draw on the 2012 Singapore Delayed Draw Term Facility.

These transactions are summarized below:

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Long-Term Debt Obligations (2)

SCL Senior Notes due 2026 and 2030 $ — $ — $ — $ 1,500 $ 1,500

2026 and 2030 SCL Senior Notes $ — $ — $ — $ 1,500 $ 1,500

Singapore Delayed Draw Term Facility — — — 46 46

Fixed Interest Payments (3)

17 125 122 214 478

Variable Interest Payments (4)

Total $ 17 $ 127 $ 124 $ 1,761 $ 2,029

_______________________

(1) Represents the six-month period ending December 31, 2020.

(1) Represents the three-month period ending December 31, 2020.

(2) See “Item 1 — Financial Statements — Notes to Condensed Consolidated Financial Statements — Note 2 — Long-Term Debt” for further details on these financing transactions.

(3) Represents the fixed interest payments related to the SCL Senior Notes due 2026 and 2030.

(3) Represents the fixed interest payments related to the 2026 and 2030 SCL Senior Notes.

(4) Based on the 1-month rate as of September 30, 2020, Singapore Swap Offer Rate (“SOR”) of 0.12% plus the applicable interest rate spread in accordance with the respective debt agreement.

Special Note Regarding Forward-Looking Statements

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“anticipates,” “believes,” “estimates,” “seeks,” “expects,” “plans,” “intends” and similar expressions, as they relate to our Company or management, are intended to identify forward-looking statements.

Although we believe these forward-looking statements are reasonable, we cannot assure you any forward-looking statements will prove to be correct.

Although we believe these forward-looking statements are reasonable, we

cannot assure you any forward-looking statements will prove to be correct.

These forward-looking statements involve known and unknown risks, uncertainties and other factors beyond our control, which may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements.

These factors include, among others, the risks associated with:

• the uncertainty of the extent, duration and effects of the COVID-19 Pandemic and the response of governments, including government-mandated property closures or travel restrictions, and other third parties on our business, results of operations, cash flows, liquidity and development prospects;

• the uncertainty of the extent, duration and effects of the COVID-19 Pandemic and the response of governments and other third parties, including government-mandated property closures, increased operational regulatory requirements or travel restrictions, on our business, results of operations, cash flows, liquidity and development prospects;

• general economic and business conditions in the U.S.

and internationally, which may impact levels of disposable income, consumer spending, group meeting business, pricing of hotel rooms and retail and mall sales;

• disruptions or reductions in travel, as well as disruptions in our operations, due to natural or man-made disasters, pandemics, epidemics or outbreaks of infectious or contagious diseases, political instability, civil unrest, terrorist activity or war;

and internationally, which may impact levels of disposable income, consumer spending, group meeting business, pricing of hotel rooms and retail and mall tenant sales;

• disruptions or reductions in travel and our operations due to natural or man-made disasters, pandemics, epidemics or outbreaks of infectious or contagious diseases, political instability, civil unrest, terrorist activity or war;

• the uncertainty of consumer behavior related to discretionary spending and vacationing at our Integrated Resorts in Macao, Singapore and Las Vegas;

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• fraud and cheating;

• our ability to establish and protect our IP rights;

• our ability to establish and protect our intellectual property rights;

• conflicts of interest that arise because certain of our directors and officers are also directors of SCL;

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis